- USD / CAD saw some intraday selling on Friday and fell to a new weekly low.
- The formation of ascending channels supports the prospects for the appearance of buying in the dips.
- A convincing break below the 1.2740-35 area is needed to negate the positive outlook.
The pair USD / CAD It struggled to capitalize on its modest intraday gains, instead finding new offers near the 1.2835 zone on Friday and updating weekly lows during the European session. However, the pair quickly reversed the decline and jumped back above the 1.2800 round level in the last hour.
Looking at the bigger picture, the USD / CAD has been trending up along an ascending channel for the past two months, pointing to a short-term uptrend. Other than this, the oscillators on the daily chart, although they have been losing traction, are still in positive territory and favor bullish traders.
This, in turn, supports the prospects for some buying to emerge on the lower dips. Therefore, any subsequent weakness below the horizontal support at 1.2770-60 is more likely to stop near the lower boundary of the mentioned channel, currently around the 1.2740 region, which should now act as a key pivot point.
A convincing break below will negate any short-term positive bias and pave the way for an extension of the recent pullback from the yearly high touched on Monday. The USD / CAD pair would become vulnerable to break below 1.2700 and accelerate the decline to test the next relevant support near the 1.2640-35 region.
On the other hand, momentum beyond the daily high around the 1.2835 region could face some resistance near the 1.2860 zone. Some subsequent purchases will reaffirm the bullish outlook and allow the USD / CAD pair to rebound to the 1.2900 level. The momentum could push the price further to the 1.2960-65 zone, or yearly highs.