Bulls could target 1.3500 level: USD/CAD technical analysis
USD/CAD technical analysis indicates a coming rally towards the 1.3500 level if the 1.3345 level is broken with conviction. It is possible that the pair could even target the 1.3800 level if oil prices continue to plummet.
The US dollar has started to rally against the Canadian dollar as oil prices tumble below the $50.00 support level, while the greenback holds its ground.
USD/CAD analysis shows that the pair could start to target the 1.3500 level if bulls start to get a footing above the technically important 1.3300 level .
USD/CAD medium-term price trend
The US dollar has managed to regain its composure against the Canadian dollar currency, after bulls successfully defended the 1.3200 support level.
A continuation of the slump in oil prices had caused traders to turn more bearish towards the Canadian dollar. This trend is set to continue if crude oil remains below the $50.00 level.
USD/CAD technical analysis over the medium-term shows that the pair could start a major technical breakout above the 1.3300 level, with bulls targeting the 1.3500 level.
Additionally, the pair has moved back inside a large rising price channel on the daily time frame, increasing the chances of a major push higher
Traders should expect further gains in the USD/CAD pair while price trades above its 200-day moving average, around the 1.3220 level.
USD/CAD short-term price trend
USD/CAD analysis shows that the pair remains technically bullish over the short term, with traders using any pullbacks as a major buying opportunity.
The four-hour time frame shows that price is approaching the neckline of a large inverted head-and-shoulders pattern, around the 1.3345 level.
Looking at the size of the bullish pattern, it is indicating that the USD/CAD pair could rally towards the 1.3800 level.
As I previously mentioned, it is plausible that last week’s decline helped to carve out a final right-hand shoulder to complete the bullish inverted head and shoulders pattern.
Overall, watch out for an explosive upside in the USD/CAD pair over the coming days and weeks if the 1.3345 level is breached.
USD/CAD technical summary
USD/CAD analysis shows that short and medium-term bulls remain in control and continue to buy dips in the pair. The 1.3800 level remains a valid target if the 1.3345 level is breached.