USDCAD is trading higher and moving further away from the more than two-year low of 1.2061. After stalling at the key 1.25 level, the pair resumed its rise, with 1.30 now in sight.
USDCAD looks set to extend its correction from the 1.20 area in the coming weeks as risk is clearly tilted to the upside. The bullish RSI and MACD are supporting this view.
Immediate support is seen at 1.2780 (mid-August high). Falling below this would shift the bias back to the downside to target the key 1.2500 level and any losses through this level would set USDCAD on the path to re-test the September 8 low of 1.2060. This was a level not seen since May 2015.
While the downtrend from 1.3793 to 1.2061 has not been reversed yet, trend and momentum indicators on shorter time frame charts are starting to align more bullishly.
Reclaiming the 1.30-handle would strengthen the bullish bias to target resistance at 1.3347. A sustained break above 1.3546 would open the way to additional gains to the 1.3793 peak and from there the overall trend would shift back to the upside.
