- USD/CAD grinds near intraday high, extends previous day’s rebound from one-week low.
- Downward-sloping resistance line from late March restricts immediate upside of Loonie pair.
- Looming bull cross on MACD, firmer RSI (14) line favors USD/CAD buyers.
- Canada Q1 GDP, risk catalysts eyed for clear directions.
USD/CAD picks up bids to attack a two-month-old descending resistance line around 1.3650 heading into Wednesday’s European session. In doing so, the Loonie pair justifies the market’s cautious mood ahead of the Canadian first quarter (Q1) 2023 Gross Domestic Product (GDP), as well as the key risk catalysts, namely the US debt ceiling deal updates and the Fed bets.
Also read: USD/CAD struggles to cheer Oil price slump near 1.3600 as US Dollar retreats ahead of top-tier catalysts
That said, the Loonie pair currently prods a downward-sloping resistance line from March 28, close to 1.3640 at the latest.
Even so, the recently firmer RSI (14) line, not overbought, joins the looming bull cross on the MACD indicator to keep the USD/CAD buyers hopeful of crossing the immediate 1.3640 resistance line.
Following that, April’s high near 1.3665-70 may act as an extra filter towards the north before directing the USD/CAD toward the late March swing high of around 1.3700 round figure.
On the flip side, a three-week-long ascending trend line and the 50-SMA, respectively near 1.3575 and 1.3565, could challenge the USD/CAD bears.
However, the Loonie pair’s bearish trajectory past 1.3565 needs validation from the previous resistance line from March 10, close to 1.3530.
Overall, USD/CAD is likely to remain firmer and can overcome the immediate upside hurdle.
USD/CAD: Four-hour chart
Trend: Further upside expected