USD/CAD Price Analysis: Attempts a breakout of the Falling Channel for the third time

• USD/CAD is attempting to deliver a breakout of the Falling Channel for the third time.
• The Loonie asset has reclaimed the 20-EMA, which indicates that the short-term trend is bullish now.
• A break into the bullish range of 60.00-40.00 by the RSI (14) will activate upside momentum.

The USD/CAD pair has dropped firmly to near 1.3435 after failing to recapture a weekly high around 1.3476 in the early European session. The Loonie asset is following the footprints of the US Dollar Index (DXY), which has surrendered the 103.00 cushion amid a sheer recovery in the risk-on impulse.

S&P500 futures have extended their gains firmly as investors’ risk appetite has improved after the market digested the hawkish interest rate guidance from the Federal Reserve (Fed). Meanwhile, the oil price is struggling to stretch its upside move above $78.50. It is worth noting that Canada is a leading exporter of oil to the United States and higher oil prices will support the Canadian Dollar.

USD/CAD is attempting to deliver a breakout of the Falling channel chart pattern on a two-hour scale, for the third time after two failed breaks due to the absence of strength in the US Dollar bulls. The Loonie is testing the strength of the breakout near 1.3432.

The 20-period Exponential Moving Average (EMA) at 1.3423 is acting as major support for the US Dollar bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is struggling to cross 40.00. A break into the bullish range of 60.00-40.00 will activate upside momentum.

A break above February 7 high at 1.3469 will drive the asset toward January 19 high at 1.3521 followed by January 6 low at 1.3538.

On the flip side, a slippage below Wednesday’s low at 1.3360 will drag the asset toward January 3 low at 1.3321 and February 2 low at 1.3262.

USD/CAD two-hour chart