Bulls take a breather below 1.2810-15 key hurdle
- USD/CAD grinds higher after refreshing monthly peak during early Asia.
- Three-week-old resistance line, a horizontal area from July challenge further upside.
- Overbought RSI conditions suggest a pullback but fortnight-long support line, 200-SMA restrict bear’s entry.
- Canadian Federal Elections: A not very crucial vote
USD/CAD retreats from the monthly high to 1.2760 amid Monday’s Asian session. In doing so, the Loonie pair justifies overbought RSI conditions staying above the short-term support line and 200-SMA.
Hence, a pullback towards 16-day-old horizontal support near 1.2710 can’t be ruled out before directing the quote to an ascending support line from September 03, around 1.2645 by the press time.
Even so, a 200-SMA level surrounding 1.2620 and the 1.2600 threshold will question the USD/CAD bears afterward.
Alternatively, a convergence of a horizontal area established since late July and an ascending resistance line from August 27, around 1.2810-15, will be a strong resistance for the pair buyers to watch during the further upside.
In a case where the USD/CAD bulls keep reins past 1.2815, the yearly peak close to 1.2950 and the 1.3000 psychological magnet will be in focus.
Overall, USD/CAD remains in the uptrend but profit booking moves on the key Canada election day can’t be ruled out.
USD/CAD: Four-hour chart
Trend: Pullback expected