USD/CAD Price Analysis: Bears are attempting to move in, 1.3720 is key

• USD/CAD bulls are in the market following a hawkish Fed chair Powell. 
• Bulls eye the 1.3850s but a retest of prior resistance could be in order.

USD/CAD is riding dynamic support after Federal Reserve's chairman Jerome Powell said that the Fed is prepared to increase the pace of rate hikes if data indicates it is warranted:

"The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," Fed's Powell said in his testimony. 

As a consequence, the yield on the US 10-year Treasury note rose to 4% before easing back to 3.96%, remaining marginally below the three-month high of 4.07% touched on March 2nd as investors assessed the pace of future rate hikes by the Federal Reserve. This gave the greenback a boost and USD/CAD remains better bid as the following illustrates:

USD/CAD daily charts

The daily charts show that the price is well and truly front side of the bullish move and there is room to go still. However, a correction could be on the cards as the following illustrates:

USD/CAD H1 chart

The prior resistance near 1.3680 is vulnerable to a restest as the above shows prior to the next move higher. From a lower time frame perspective, the bears have a lot of work to do first:

The hourly chart has a series of trendline support that the bears will need to crack and horizontal structures as well, but a break of 1.3720 opens the risk of a test below 1.3700 and a move through the Fibonacci scale with the 50% mean reversion level eyed in the 1.3650s.