- USD / CAD recovers above 1.31 amid a bullish crossover of moving averages.
- The pair has seen a breakout of the ascending wedge on the 1 hour chart.
- The 1.3127 level is likely to challenge the recovery.
USD / CAD is attempting to rebound from a dip below 1.3100 as the bulls struggle to regain control amid a rebound in the US dollar across the board and a pullback in the WTI rally.
From a technical perspective in the short term, the pair has found new purchases just above the critical support at 1.3083. This could be mainly attributed to a bullish crossover seen on the 1 hour chart.
The upward sloping 100 hour moving average has cut above the 200 hour horizontal moving average, suggesting a likely rebound in the pair.
The RSI on the 1 hour chart has also witnessed a rally and has risen towards the 50 level while it was inside the bearish zone.
On the road to recovery, the confluence of the 21 and 50 hourly SMAs at 1.3127 is likely to offer strong resistance to the bulls. Higher up, the rising trend line support, now turned into resistance at 1.3142, will be the level to beat for buyers.
On the downside, acceptance below the aforementioned support at 1.3083 is needed to revive the bearish momentum.
The next significant support is at the November 12 lows of 1.3056.
In a broader perspective, the risk remains to the downside as the pair has shown a breakout of the ascending wedge on the 1 hour chart, with a test of the measured target of 1.2885 likely on the table in the coming week.
USD / CAD 1 hour chart
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