USDCAD peaked above the key 1.3400 level on Friday but the pair failed to record a daily close above this key psychological level. After hitting a 2-month high of 1.3436, prices fell back down to 1.3370. The limited decline and the rebound towards 1.3400 today, suggests that the underlying short-term trend is still positive.
The bullish bias was strengthened after the market rose above the 200-day and then above the 50-day moving average. But RSI has reached overbought levels so this could suggest some consolidation in the near-term. If prices close above the 1.3400 level today, they could target 1.3436 (Friday high) and then gain momentum to target the 1.3560 area (reached on December 28).
Alternatively, a downside move would find support at 1.3356 and 1.3283 before targeting the 1.3200 area. A drop below this key level would weaken the current short-term bullish bias.
Origin: XM
