USD/CAD traded higher today after it hit support near a prior downside resistance line taken from the high of December 3rd. Having that in mind, as well as that the rate is trading above a new upside line drawn from the low of January 7th, we would consider the short-term outlook to be slightly positive.
If the bulls are willing to stay behind the driver’s seat, we could soon see them aiming again for the 1.3105 zone, marked by Thursday’s high. A break above that hurdle would confirm a forthcoming higher high on the 4-hour chart and may see scope for extensions towards the 1.3140 zone, which provided support on December 22nd and 23rd. If that barrier is not able to halt the advance either, then the bulls may put the 1.3175 zone on their radars. That zone acted as a decent resistance between December 18th and 23rd.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near its 50 line and is currently pointing up, while the MACD, although below its trigger line, lies within its positive territory and appears ready to move back above its trigger. Both indicators suggest that the rate may have started gaining upside speed, which enhances our view for some further near-term advances.
On the downside, we would like to see a dip below 1.3007 before we start examining the bearish case again. Such a move would bring the pair back below the downside line drawn from the high of December 3rd, and could initially aim for the 1.2975 or the 1.2960 zone, which provided strong support between December 31st and January 7th. If the bears decide to bypass that hurdle this time around, then we could see them targeting the 1.2915 territory, marked as a support by the low of October 16th, 2018.
