- USD/CAD remains sidelined after reversing from two-week lows.
- Bullish candlestick formation, clear rebound at 1.3270 supports confluence lure buyers.
- The November 2022 low is added to the downside filter.
USD/CAD waters near 1.3330 early Wednesday after a volatile day that first renewed a two-week bottom before bouncing off the support confluence at 1.3337 near 1.3337. In doing so, the Looney Pair drew a bullish Doji candlestick on Tuesday.
A stable RSI (14) and lack of a bearish MACD signal, as well as the convergence of the candlesticks and the 200-day exponential moving average (EMA) and recovery from the uptrend line three months ago, underpin the bullish bias. USD/CAD pair.
That said, the 21-day EMA level surrounding 1.3385 shows that USD/CAD will bounce back soon, ahead of the 1.3400 round number and monthly peak near 1.3475.
A subsequent rally to the January 19th swing high of 1.3520 and then to the previous monthly high close to 1.3685 cannot be ruled out.
Conversely, the aforementioned confluence of support shows USD/CAD near 1.3270, and to convince bears of the Looney pair, the confluence marked February 2023 and November 2022 respectively. We need to test the break from the lows around 1.3260 and 1.3225.
Still, the 1.3200 threshold could act as a last resort for the pair’s buyers.
Overall, USD/CAD is heading for a short-term rally, but buyers are seeking confirmation from the 21-day EMA.
USD/CAD: Daily chart
Trend: Expected recovery