FX.co ★ USD/CAD

The USD/CAD currency pair seems to be taking advantage of the bounce back since its 1.3730 low this week, which is also the lowest point in three months, and is gaining momentum for the second straight day on Tuesday. The price is still holding onto minor gains on an intraday basis and currently trades around 1.3865. The US Dollar (USD) sees some follow-on buying as the threat of rising inflation amid oil price volatility keeps expectations of a rate increase by the US Federal Reserve (Fed) alive. Other than this, the political tensions stemming from the conflict between the US and Iran provide tailwinds for the safe-haven dollar. In addition, falling oil prices and ongoing trade tensions between the US and Canada are hurting the commodity currency, the Loonie. Technically speaking, a break above the 23.6% Fibonacci retracement of the June-August drop can be viewed as one of the most important drivers for bullish investors. Furthermore, momentum oscillators are showing bullish signals, with the RSI(14) near 62 and MACD values remaining in the positive zone. It suggests that buyers are trying to consolidate the USD/CAD pair after its recent correction and push higher from a multi-month low. The next push higher could likely find some quick resistance in the area of 1.3900 before the 1.3925-1.3930 confluence area, which consists of the 100-period SMA on the 4-hour time frame and the 38.2% Fibonacci level. Further buying could then encounter additional resistance at the 50.0% Fibo level. level at 1.3988 and the 61.8% retracement level of 1.4049. To the downside, the first support comes at the 23.6% Fibonacci level at 1.3852, while the next floor develops at the Fibo. anchor at 1.3731.