Key Highlights
· US dollar traded higher against the Canadian dollar during the Asian session, and moved closer to the 1.4300 area.
· The stated level in the USD/CAD pair represents a major resistance and may ignite a short-term correction.
· Today in the US, the Services Purchasing Managers Index (PMI) will be released by Markit Economics, which may impact the greenback to an extent.
· Moreover, the US Consumer Confidence will be released by the Conference Board, which is forecasted to remain at 96.5 in January 2015.
USD/CAD Technical Analysis
The USD/CAD pair recently managed to break a major bearish trend line on the hourly chart to clear the way for more gains in the near term. However, the pair stalled around the 1.4300 area, represents a major resistance and may ignite a short-term correction.
On the downside, the broken trend line could act as a support if the pair corrects lower from the current levels. However, the 50% Fib retracement level of the last leg from the 1.4113 low to 1.4300 high can also act as a barrier for sellers.
The hourly RSI is also above the 50 mark, which is a positive sign for bulls. On the upside, a break above the 1.4300 level is needed for the pair to test the 1.4340 area. The 100 hourly simple moving average is also positioned around the mentioned level that can act as a hurdle for buyers looking ahead.