On Friday, USD/CAD makes a slight intraday rebound move from the 50-day SMA support. Although a lower USD limits gains, falling oil prices boost and weaken the Canadian dollar. The configuration favors bullish traders and provides hope for additional price appreciation.

On the last day of the week, the USD/CAD pair defends the 50-day SMA support and draws some buyers at the 1.3570-1.3565 region. The commodity-linked Loonie is under pressure, and the major is given some support as crude oil prices retain their negative leaning close to the YTD low. However, the upside for the USD/CAD pair is constrained by the pervasive US Dollar selling tendency, which is boosting wagers on the Fed raising rates less aggressively. Despite moving down from the daily low by a few pips, spot prices remain above the 1.3600 level during the early North American session.

Technically speaking, the recent rebound from the 4-hour chart’s confluence support—a roughly three-week-old ascending trendline and the 100-period SMA—favors optimistic traders. On daily/4-hourly charts, oscillators suggest possibilities for more rises. However, the failure this week around 1.3700 makes it wise to hold off on any bullish wagers until there has been some follow-through action beyond the handle. However, the USD/CAD pair still seems prepared to test the next important barrier in the 1.3745–1.3750 range.

With some follow-through buying, spot prices might rise to the November monthly swing high or around the 1.3800 level. As it moves toward the 1.3900 round figure and the YTD top, which is in the 1.3975-1.3980 zone, the USD/CAD pair may finally appreciate the 1.3840-1.3850 area.

On the other hand, the 100 DMA range of 1.3570-1.3560 may continue to shield the immediate downside. A strong breach below might hasten the decline into the 1.3500 level. Any further decline, however, may be supported by the 1.3460-1.3450 confluence support. The latter should serve as a critical milestone; if it is forcefully broken, the optimistic view will be invalidated, and the near-term bias will be shifted in favour of bearish traders. The USD/CAD pair might become vulnerable, falling below the 1.3400 level and testing the support of the 100-day SMA.

4-hour USD/CAD chart