USD/CAD is trading modestly flat below 1.3500 in Friday’s Asian trading so far, as bulls take a breather after three straight days of unrelenting rise.
Hawkish Fed outlook pushed US Treasury yields to multi-year highs, driving the US dollar index to fresh cycle highs of 111.81. The pair took cues from firmer yields and the dollar and hit the highest level since July 2020 at 1.3544.
Although the gains quickly faded after WTI surged 1% on Thursday amid escalating Russia-Ukraine tensions and hopes for a revival in Chinese demand. The sharp pullback in the US dollar also collaborated with the retreat in the major. The dollar corrected from two-decade highs after the Japanese yen intervention triggered a massive slump in the USD/JPY pair.
Looking ahead, the sentiment around the US dollar will continue to have a significant impact on the major, with eyes on the US S&P Global PMIs.
From a short-term technical perspective, USD/CAD is teasing a bull pennant breakout on the four-hour chart while challenging the falling trendline resistance at 1.3479.
A four-hour candlestick closing above the latter will confirm the bullish continuation pattern, opening doors for a retest of the two-year highs at 1.3544.
Ahead of that the 1.3500 round figure will offer a stiff resistance on the renewed upside.
The 14-day Relative Strength Index (RSI) has eased from the overbought region, still above the midline, justifying the bullish potential in the near term.
On the flip side, failure to find acceptance above the aforesaid resistance at 1.3479 will recall sellers.
They will then aim for the 1.3450 psychological support. A sharp drop towards the bullish 21-Simple Moving Average (SMA) at 1.3390 cannot be ruled out.
© 2000-2022. All rights reserved.
This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at email@example.com.