USDCAD rose as high as 1.2620, a level last experienced on December 28 and is posting a bullish rally following the rebound on the 1.2250 support level last Friday. Additionally, dollar/loonie is in progress to record the second consecutive green week as it also successfully surpassed the 23.6% Fibonacci retracement level at 1.2470 of the down-leg from 1.3800 to 1.2060.
Short-term momentum indicators are also pointing to a continuation of the bullish bias. However, the RSI is sloping to the downside in the positive territory, suggesting that the price could have a small retracement before its upward movement. On the other hand, the MACD oscillator is endorsing the bullish tendency as the indicator is rising near the zero line, deviating above its signal line.
If price jumps above the 1.2620 resistance level, which coincides with the upper Bollinger Band, there is scope to test the 38.2% Fibonacci mark near 1.2720. Rising above it could see prices re-test the 1.2910 peak taken from December 19.
In the event of a continuation of the major bearish trend, the 23.6% Fibonacci mark could be the next pause. A break below this level would shift the short-term outlook to bearish as it could take the pair towards the 1.2250 support barrier.