USD/CAD Price Analysis: Further upside needs validation from 1.3380
- USD/CAD buyers attack four-month-old resistance line at the highest levels since October 2020.
- RSI conditions challenge buyers but bears need validation from previous resistance near 1.3280.
- Buyers can target October 2020 high during further upside.
USD/CAD struggles to extend the previous day’s run-up as buyers jostle with a short-term resistance line amid overbought RSI conditions during early Wednesday morning in Europe. That said, the Loonie pair seesaws around 1.3370-80 as bulls await the Fed’s verdict.
Given the overbought RSI (14), USD/CAD prices are likely to witness pullback from an upward sloping resistance line from May 12, close to 1.3380 by the press time.
However, the pair sellers will await a clear downside break of the previous resistance line from August 2021, close to 1.3280 at the latest.
Following that, tops marked in July and September of the current year, respectively around 1.3225 and 1.3205, could challenge the USD/CAD bears. It should be noted that a weekly ascending trend line near 1.3285 adds to the downside filters.
Alternatively, a daily closing beyond the 1.3380 hurdle could quickly propel the quote towards October 2020 high surrounding 1.3420.
Should the USD/CAD bulls ignore overbought RSI conditions and keep reins past 1.3420, a run-up towards June 2020 peak surrounding 1.3715 can’t be ruled out.
USD/CAD: Daily chart
Trend: Pullback expected