USD/CAD Price Analysis: Bullish engulfing candle emerges, as buyers eye 1.3700
- USD/CAD snaps three days of losses, forming a bullish engulfing candle pattern
- USD/CAD Price Analysis: A decisive break above 1.3600 exposes 1.3700; otherwise, a fall to 1.3500 is on the cards.
The USD/CAD hurdles the 20-day Exponential Moving Average (EMA) at 1.3580, back above the 1.3600 threshold for the third time in the week, as the pair formed a bullish engulfing candle pattern. As the Asian session begins, the USD/CAD is trading at 1.3601, registering minimal gains of 0.02%.
USD/CAD Price Analysis: Technical outlook
From a daily chart perspective, the USD/CAD pair remains neutral-to-upward biased after peaking twice at around 1.3704, forming a double top. Nevertheless, failure to extend its losses below the 50-day EMA at 1.3532 exacerbated a rally above 1.3600, as the USD/CAD looks poised to re-test the 1.3700 mark ahead of the next year. Even though the Relative Strength Index (RSI) is in bullish territory but almost flat, and the Rate of Change (RoC) suggests that sellers are losing momentum, the USD/CAD might consolidate on either side of the 1.3600 mark. Also, the lack of economic data through the week’s reminder might refrain traders from opening fresh bets in the USD/CAD pair.
If the USD/CAD decisively clears 1.3600, the next resistance would be the 1.3700 figure. Break above will expose November’s high of 1.3808, ahead of the YTD high of 1.3977. As an alternate scenario, the USD/CAD first support would be the 20-day EMA at 1.3580, followed by the 50-day EMA at 1.3532, ahead of the 1.3500 figure.