- USD/CAD struggles to defend upside momentum at the highest levels in a month.
- Overbought RSI (14) line challenges Loonie pair buyers inside two-week-old bullish channel.
- Descending trend line from early March, 200-SMA are extra trading filters to watch amid likely pullback in price.
USD/CAD treads water around the highest levels since late March, making rounds to 1.3640 amid early Thursday morning in Europe. In doing so, the Loonie pair justifies overbought conditions of the RSI (14) line. However, a fortnight-long bullish channel and sustained trading beyond the 200-SMA keeps the Canadian Dollar (CAD) bears hopeful.
With this, the quote’s pullback towards the 1.3600 round figure appears imminent. However, the aforementioned channel’s bottom line, close to 1.3595, could challenge the pair sellers afterward.
Even if the USD/CAD bears manage to defy the bullish chart formation by a downside break of 1.3595 support, the 200-SMA level of 1.3560 puts a floor under the prices.
On the flip side, a six-week-long descending resistance line, close to 1.3675 at the latest, restricts the immediate upside of the USD/CAD.
Following that, the short-term rising channel’s top line, near 1.3690 by the press time, can check the Loonie pair buyers before directing them to the late March high surrounding 1.3800.
In a case where the USD/CAD bulls occupy the driver’s seat beyond 1.3800, the yearly top marked in the last month around 1.3860 will be in the spotlight.
Overall, USD/CAD is likely to remain firmer but a short-term pullback can’t be ruled out.
USD/CAD: Four-hour chart
Trend: Pullback expected
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