USDCAD Technical Analysis -
The USDCAD pair breaks the key resistance area and extends the rally above the channel.
daily chart,
We can see that USDCAD broke the key resistance of 1.3620 following the hot US CPI report and extended the climb to the top of the channel.
This has opened the door for a climb to the 1/3862 resistance, so buyers will look for buying opportunities on lower timeframes.
On the other hand, sellers want to see the price reach key levels and make a new low.
4 hour chart
The price seems to be struggling a bit to maintain the bullish momentum after such a strong period. From a risk management perspective, buyers will have a much better risk of setting up a trade around the 2.38% Fibonacci retracement level and the 8.61% Fibonacci retracement level, where the trend line also intersects. On the other hand, sellers are looking for breaks below these levels to accumulate and position for new lows.
1 hour chart
We can see that the last move higher is diverging with the MACD, which is generally a sign of weakening momentum that is often followed by a pullback or reversal.
In this case, it can be a signal to pull back towards the base of divergent formation around the level of 1.3640, where we also have the Fibonacci level of 2.38%. This is where we can expect buyers with defined risk to enter below the level to set up for a new high. On the other hand, sellers are looking for a lower breakout for the position for a trend line break.