USD/CAD Price Analysis: Breaks through descending channel/100-period SMA confluence hurdle

• USD/CAD added to the previous day’s strong positive move and shot to multi-day tops.
• The momentum seems to have shifted the near-term bias in favour of bullish traders.

The USD/CAD pair gained traction for the second consecutive session on Tuesday and shot to three-day tops, around the 1.3150-55 region during the first half of the trading action on Tuesday.

A sudden pickup in the USD demand pushed the pair beyond a resistance marked the top end of over two-month-old descending channel. This coincided with 100- SMA on the 4-hourly chart and a sustained move beyond might have already set the stage for additional gains.

Bullish technical indicators on the mentioned chart further add credence to the constructive set-up. However, oscillators on the daily chart – though have been recovering from the negative territory – are yet to confirm the positive outlook and warrant some caution.

That said, some follow-through buying should assist the pair to climb further and aim to reclaim the 1.3200 round-figure mark. The momentum could further get extended towards the next major hurdle, which coincides with 200-period SMA, around the 1.3235-40 region.

On the flip side, any intraday pullback might now attract some dip-buying near the channel resistance breakpoint, around the 1.3115 region. This, in turn, should help limit the downside. Subsequent support is pegged near the 1.3100 mark ahead of the 1.3085 region (session lows).

USD/CAD 4-hourly chart

Technical levels to watch