- USD/CAD bounces back above 1.31 amid SMA bull cross.
- The spot saw a rising wedge breakdown on the hourly chart.
- 1.3127 likely to challenge the recovery from sub-1.31 levels.
USD/CAD is attempting a recovery from a drop below 1.3100, as the bulls fight back control amid a bounce in the US dollar across the board and a retracement in WTI’s rally.
From a near-terrn technical perspective, the spot found fresh bids just above the critical support of 1.3083. This could be mainly attributed to a bullish crossover spotted on the hourly chart.
The upward-sloping 100-hourly moving average (HMA) cut the horizontal 200-HMA from below, suggesting a likely bounce in the spot.
The hourly Relative Strength Index (RSI) also witnessed an uptick and inches towards the 50.00 level while within the bearish zone.
On the road to recovery, the confluence of the 21 and 50-HMAs at 1.3127 is likely to offer stiff resistance to the bulls. Further up, the rising trendline support now resistance at 1.3142 will be the level to beat for the buyers.
To the downside, acceptance below the abovementioned crucial support at 1.3083 is needed to reviving the bearish momentum.
The next significant support is seen at November 12 lows of 1.3056.
From a broader perspective, the risk remains to the downside, as the major has charted a rising wedge breakdown on the given timeframe, with a test of the measured target of 1.2885 likely on the cards in the week ahead.
USD/CAD: Hourly chart
Credit: FX Street