USD/CAD continues to trade above its short-term tentative upside support line drawn from the low of October 29th. Although we are seeing a bit of a slowdown in the upside speed of the price, which could lead the pair to a small correction lower, as long as the rate remains above that upside line, we will stay positive, at least over the short-term outlook.
A small retracement back down might bring the rate to the aforementioned upside line for a quick test. If that line provides decent support for the pair, the bulls could re-enter field and lift USD/CAD to 1.3240 barrier, marked by the high of October 15th. If that barrier eventually surrenders to the buyers, its break could open the door to some higher areas, one of which might be the 1.3268 level, marked by the low of October 10th.
Our oscillators, the RSI and the MACD, are showing some signs of topping, although they still have room for a bit more upside. There RSI is above 50 and close to 80 territory, but is now slightly pointing to the downside. The MACD is still above zero and its trigger line, but is running somewhat flat, at the moment. Both indicators could be in support of the above-discussed scenario of a small correction before another leg of buying.
Alternatively, a break of the aforementioned upside line and a rate-drop below the 1.3197 hurdle, marked near the highs of November 1st and 7th. This is when more sellers could join in and drive the pair to the next potential support zone, at 1.3160, which is the low of November 7th. If the selling doesn’t stop-there, a break of that zone could lead USD/CAD to the 1.3115 level. That level marks the current low of November.
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