Canada Dollar Analysis: USD/CAD Updates
The USD/CAD currency pair has reached a new yearly peak at 1.4200, reflecting a strong upward trend following the recent meeting of the Bank of Canada (BoC). The exchange rate appears to be supported by the upward trajectory of the 50-Day Simple Moving Average (SMA) at 1.3926, as it continues to trade above this key level.
Current Trends: USD/CAD Surges Higher
It is important to note that USD/CAD recently broke its pattern of achieving higher highs and lows after the BoC indicated that they would be assessing the necessity for further policy rate adjustments gradually, following a 50 basis point cut in their latest meeting for 2024.
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The response to the BoC's rate decision has kept the Relative Strength Index (RSI) within a non-overbought range; however, a rise above 70 in this oscillator could coincide with further gains in USD/CAD, similar to the previous bullish momentum observed earlier this year.
Looking ahead, USD/CAD is poised for potential appreciation throughout the week, particularly as it rebounds from a weekly low of 1.4094. Nonetheless, if the RSI remains below 70, it may indicate that bullish momentum is starting to wane.
USD/CAD Price Chart – Daily
- The upward momentum in USD/CAD persists, marking a fresh yearly high of 1.4200, suggesting a bullish trend driven by the positive slope of the 50-Day SMA at 1.3926.
- A sustained break or close above 1.4210, which corresponds to the 78.6% Fibonacci extension, could set the stage for a challenge of the April 2020 high of 1.4299, with key resistance expected near 1.4480 (100% Fibonacci extension).
- Conversely, if USD/CAD fails to gain traction above 1.4210, it may retreat toward support levels around 1.4040 (23.6% Fibonacci retracement) to 1.4080 (78.6% Fibonacci extension), potentially threatening the positive trajectory of the moving average if it drops below the 1.3970 to 1.4000 range (61.8% Fibonacci extension).
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--- Analysis provided by financial strategist
