USD/CAD hsa been bullish but found itself in a consolidation last week between roughly 1.24 and 1.2535 as we can see in the 1H chart.
Note that during this consolidation price managed to hold above the 200- and 100-hour simple moving averages (SMAs), and even the 50-hour SMA for the most part. Along with the fact that the 1H RSI held above 40, we can say that the market maintained its bullish bias and momentum throughout the consolidation.
This week started with price breaking above the 1.2538 high from last week, signaling bullish continuation. Note the bullish candle during the 6/1 session which reversed a bearish attempt under 1.25. This bullish candle established an intra-session pivot just above 1.2450, which could be key throughout the week. In other words, a break below 1.2450 might signal further consolidation and even a bearish corretction, which would put pressure on the 1.24 support.
Staying with the bullish outlook, let’s take a look at the upside risk.
Looking at the daily chart, we can see that the market has essentially completed a bullish reversal, except for a couple of conditions, which we will discuss shortly. But first, we can see that price has pushed above
1) a previous support pivot around 1.2350-1.24,
2) a falling trendline,
3) and the 100- and 50-day SMAs.
The next 2 conditions are
1) a break above another falling trendline and
2) an RSI push above 70.
Essentially, if price can hold above 1.2450 this week, the upside risk will increase towards the highs on the year in the 1.28-1.2834 area.
Now, a break below 1.2450 might shelf the bullish continuation outlook for the short-term, but we should still look at USD/CAD as bullish in the medium-term and limit the short-term bearish outlook to 1.22.
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