USDCAD has been oscillating within a broad range defined by support at the 1.35185 area and resistance near the 1.3900 major psychological level, and the pair is currently nearing the upper boundary of this range after a sustained rally from the May lows.
Price has climbed steadily since bottoming out around the 1.3550 region in early May, carving out a series of higher lows that reflect building bullish momentum. The pair is now pressing against the range highs around 1.3908, and how price reacts at this ceiling could determine the next significant directional move.
A clean break above the range resistance would confirm a bullish breakout, potentially setting off a measured move rally equal to the height of the range. That would project a target well above the 1.3900 handle, opening the door to fresh multi-month highs.
On the other hand, a rejection from current levels could send USDCAD sliding back to the range midpoint or all the way down to the floor near 1.3518.
The 100 SMA (blue) has crossed back above the 200 SMA (red), confirming that the path of least resistance is shifting to the upside and that the climb is more likely to gain traction than to reverse. Price is also trading above both moving averages, which could serve as dynamic support on any dips.
Stochastic is hovering deep in the overbought region, though, reflecting exhaustion among buyers near resistance. Turning lower from here would signal a return in selling pressure, so a pullback could be on the cards before another breakout attempt materializes.
RSI is also pressing into elevated territory but still has a little room to run before hitting a ceiling. If the oscillator rolls over in tandem with stochastic, it could confirm that sellers are ready to defend the range top, at least in the near term.
USDCAD could take cues from the US NFP release and Canadian employment report tomorrow, as a strong US jobs report could continue to stoke hawkish Fed bets and propel the dollar higher.
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