USD/CAD Price Analysis: Testing the breakout of Wyckoff’s Accumulation around 1.3450

• USD/CAD is aiming to resume its upside journey after testing the breakout region of the Inventory Accumulation.
• The 50-EMA at 1.3450 is acting as a major cushion for the US Dollar.
• S&P500 futures have attempted a recovery in Asia, portraying a recovery in the risk-on profile.

The USD/CAD pair has dropped to near the critical support around 1.3450 in the Asian session. The Loonie asset is following the selling pressure faced by the US Dollar Index (DXY), which has dropped again to near 101.60. The market mood is demonstrating the risk-appetite theme as the S&P500 futures have sensed buying interest in Asia.

Meanwhile, the 10-year US Treasury yields have failed to sustain above 3.40%. It seems that hawkish commentaries from the Federal Reserve (Fed) policymakers have failed to improve the safe-haven’s appeal.

On an hourly scale, USD/CAD is testing the breakout zone of Wyckoff’s Inventory Accumulation area placed in a 1.3322-1.3460 range. The Loonie asset has already delivered a breakout of the accumulation and is now testing the strength of the breakout around January 12 high at 1.3460.

The 50-period Exponential Moving Average (EMA) at 1.3450 is acting as a major cushion for the US Dollar.

Meanwhile, the Relative Strength Index (RSI) (14) is gauging support around 40.00 after a gradual corrective move.

The asset will resume its upside journey after a decisive move above December 27 low at 1.3484, which will drive the asset toward the horizontal resistance placed around 1.3540. A breach of the latter will send the major toward December 28 high at 1.3612.

Alternatively, a breakdown below January 16 high at 1.3418 will strengthen the Canadian Dollar and will drag the asset toward January 9 low at 1.3357 and January 13 low at 1.3322.

USD/CAD hourly chart