What Happened
USD/CAD extended its winning streak on Thursday, climbing for a third consecutive session as the US Dollar (USD) attracted fresh buying interest. The pair pushed higher as traders digested the latest US economic data, which reinforced expectations that the Federal Reserve (the Fed โ America’s central bank) will keep interest rates elevated for longer. Despite Oil (WTI) trading at firm levels โ which typically supports the Canadian Dollar given Canada’s role as a major oil exporter โ the currency pair continued to grind upward, with USD/CAD trading around the 1.3980โ1.4000 zone.
Key Levels
- Support 1: 1.3900 โ a psychologically significant round number and recent base for the pair
- Support 2: 1.3820 โ prior consolidation zone and medium-term floor
- Resistance 1: 1.4000 โ key round-number level and near-term ceiling
- Resistance 2: 1.4100 โ upper boundary of the recent trading range and multi-week high area
Technical Picture
USD/CAD is in a short-term uptrend following three consecutive days of gains. The pair is trading above its 20-day moving average (a short-term trend indicator), which signals that buyers are in control over the near term. Momentum indicators are tilting positive but are approaching overbought territory, meaning a pause or pullback near 1.4000 is possible before any further upside.
What Traders Are Watching
All eyes are on the 1.4000 level โ a clean break and daily close above this mark could open the door to 1.4100. On the downside, a slip back below 1.3900 would signal the bulls have lost control and may invite sellers back in. Traders will also be monitoring weekly US jobless claims and any Fed commentary for fresh direction on the USD.
Bias
Bullish on USD/CAD โ The US Dollar’s renewed strength, driven by hawkish Fed expectations, is outweighing the positive influence of elevated Oil prices on the Canadian Dollar. The path of least resistance remains to the upside while price holds above 1.3900.
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