- Failed attempt of loonie bulls to drag the asset below the March lows has fetched responsive buying.
- The greenback bulls seek a bull cross of 20- and 50-period EMAs for validation.
- An establishment of the RSI (14) above 60.00 will activate a bullish setup.
The USD/CAD pair has fetched significant bids in the North American session on Tuesday after attempting a re-test of its previous week’s low at 1.2430. A responsive buying near the potential lows indicates that the market participants have considered the asset as a value buy, which has attracted potential investors.
On an hourly scale, USD/CAD is auctioning in a descending triangle formation whose horizontal support is placed from March lows at 1.2430 while the descending trendline is plotted from March 28 high at 1.2593. It is worth noting that a firmer responsive buying near the lower boundary of a descending triangle advocates a bullish reversal and eventually leads to an intensive buying activity.
The greenback bulls seek a bull cross of 20- and 50-period Exponential Moving Averages (EMAs), which are currently trading at 1.2472 and 1.2480 respectively.
Meanwhile, the Relative Strength Index (RSI) (14) has shifted to a 40.00-60.00 range, which eradicates weakness in the counter. However, a breach of 60.00 by the momentum oscillator will trigger a bullish setup for the asset.
A breach above the psychological resistance of 1.2500 decisively will drive the asset towards April 1 high at 1.2540. Further, a cross of the latter will send the asset to its ultimate target of March 28 high at 1.2593.
However, Lonnie bulls can shift gear if the pair drop below Tuesday’s low at 1.2403, which will drag the major towards the November 2021 low and round level support at 1.2352 and 1.2300 respectively.
USD/CAD hourly chart
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