The USDCAD found solid support yesterday, bouncing from a key trendline near recent lows and the swing area between 1.3588 and 1.3594. That zone held again during early trading today, keeping buyers in control and setting the stage for a continued recovery.
Momentum accelerated as the pair broke above yesterday’s high and other key swing levels (see red numbered circles). Importantly, the subsequent dip retested the breakout zone and found willing buyers, reinforcing near-term bullish sentiment.
The next major test for buyers comes at a confluence of resistance: the 100-hour moving average and the 1.3656 swing level (green numbered circles 1 and 2). A break above this area would add conviction to the rally and open the door toward the 50% retracement of the July range at 1.36645.
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So far, the upside push has been technically driven and firm. However, sustained trading above the 100-hour MA is essential to validate this recovery as more than a corrective bounce. Failure to do so could suggest the rally is simply a pause within the broader downward trend.
This article was written by Greg Michalowski at investinglive.com.
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