The USD/CAD pair grapples to return to the ascending channel as bullish bias is in play.
The 14-day RSI hovers near the 70 mark, suggesting overbought conditions and a potential downward correction ahead.
A break below the nine-day EMA at the 1.3741 level could cause the emergence of a bearish trend.
The USD/CAD pair maintains its position on recent gains from the previous session, trading around 1.3800 during the Asian hours on Friday. On the daily chart, the analysis shows that the pair is testing the lower boundary to return to the ascending channel pattern, which, if remains within the channel, supports the bullish trend.
The 14-day Relative Strength Index (RSI) is slightly below 70 level, confirming the ongoing bullish sentiment is in play. However, a move above the 70 mark would suggest overbought conditions and signal a potential downward correction.
On the upside, the USD/CAD pair tests the immediate barrier at the lower boundary of the ascending channel at the 1.3810 level. A return to the ascending channel would reinforce the bullish bias and support the pair to explore the region around the upper boundary of the ascending channel around 1.3920 level. Further resistance appears at the 25-month high of 1.3946 level, which was recorded on August 5.
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