- USD/CAD seems in the corrective mode for the previous two sessions.
- Bulls struggle to validate 100-day SMA for additional gains.
- Momentum oscillators cautions for any directional bet, await confirmation.
USD/CAD manages to hold onto the gains on Wednesday in the early European session. The pair consolidates near the multi-month highs around the 1.2330 level.
At the time of writing, USD/CAD is trading at 1.2332, up 0.14% so far.
USD/CAD daily chart
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On the daily chart, the USD/CAD pair has posted substantial gains after breaking a broader trading range of 1.2050 and 1.2180 on June 16. The pair touched the levels last seen in April and has been corrected by nearly 200 points from the high.
Now, if price sustained above the session’s high, then it could crawl back to the previous day's high at 1.2403.
That said, USD/CAD trades below the 100-day Simple Moving Average (SMA) at 1.2414. A sustained move above 100-day SMA is required to test the 1.2500 horizontal resistance level.
The Relative Strength Index (RSI) reads at 54 which implies that the bulls have plenty of room to scale back to the high of April 23 at 1.2534.
Alternatively, if price surrenders to the critical 1.2330 level, then it will open the gates for the downside movement toward the low of July 17 at 1.2262.
Next, the market participants would like to recapture the 1.2220 horizontal support level followed by June 16 low at 1.2157.