USD/CAD Price Analysis: Justifies Dragonfly Doji candlestick to bounce off key support line towards 1.3400

• USD/CAD grinds higher after recovering from six-month-old ascending support line.
• Bullish candlestick formation, nearly oversold RSI (14) add strength to recovery moves.
• 200-DMA prods Loonie pair buyers; bears need validation from 1.3300 to keep the reins.

USD/CAD seesaws around 1.3370-80 as it struggles to defend the previous day’s corrective bounce off the short-term key support line during early Tuesday. In doing so, the Loonie pair justifies the bullish candlestick, marked on Monday, as well as the nearly oversold RSI (14) conditions.

Even if the USD/CAD pair’s latest inaction, the Loonie pair remains off the bear’s radar, especially after posting the Dragonfly bullish Doji candlestick the previous day while recovering from an upward-sloping support line from November 2022.

As a result, the quote’s retreat remains elusive unless breaking the aforementioned support line, currently around 1.3315. Also acting as a downside filter is the 1.3300 round figure.

It’s worth noting that February’s bottom is around 1.3265 and the late 2022 trough surrounding 1.3240 can also challenge the USD/CAD bears before giving them control.

On the contrary, the Loonie pair’s latest rebound can aim for the 200-DMA hurdle of around 1.3450. However, the buyers will need validation from the 100-DMA level surrounding 1.3520 to aim for the previous monthly high of around 1.3670.

In a case where the USD/CAD remains firmer past 1.3670, the odds of witnessing a rally toward the yearly high of near 1.3860 can’t be ruled out.

USD/CAD: Daily chart

Trend: Limited recovery expected