USD/CAD has been ranging since early February after making a high around 1.28. Let’s follow up on this consolidation range as USD/CAD is heading towards this consolidation range support.
The daily chart shows that although there was a break above 1.28 in March, the USD/CAD remained in consolidation. Last week, price action failed to clear 1.28 and retreated, extending lower after the US NFP report, which disappointed forecasts and brought the greenback lower across the board.
The dollar-loonie is now hovering above the 1.2350-1.24 consolidation support zone. Given the fact that the prevailing trend is bullish, strong, and intact, we should probably respect this support area.
Now, if there is indeed a rebound this week, let’s monitor the 4H chart. If price is still bearish, there should be resistance around 1.2570-1.2575, which would keep the USD/CAD under the 200-, 100-, and 50-period SMAs. The 4H RSI should also hold below 60.
However, if price pushes above 1.26, and the 4H RSI climbs back above 60, we would lose the bearish bias and momentum, and the technical picture in USD/CAD would once again be bullish, with pressure towards the highs around 1.28.
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