• USD/CAD remains firmer around the highest level since November 2020.
• Overbought RSI, 61.8% FE and upper line of the bullish channel challenge the buyers.
• July’s top restricts immediate downside, October 2020 high acts as an additional upside filter.

USD/CAD remains on the front foot around 1.3285 during Monday’s early European morning, up for the third consecutive day near the 22-month high flashed the previous day.

A successful break of July’s top, surrounding 1.3220 keeps the USD/CAD buyers hopeful. However, nearly overbought RSI (14) joined the upper line of an 11-month-old ascending trend channel and the 61.8% Fibonacci Expansion (FE) of October 2021 to August 2022 moves to challenge the pair buyers.

With this, the 1.3300-10 resistance confluence restricts the Loonie pair’s immediate upside, a break of which could direct the quote towards the upper line of an immediate bullish channel, close to 1.3370.

It’s worth noting that October 2020 peak near 1.3390 and the 1.3400 threshold also act as short-term hurdles to watch for the USD/CAD bulls.

Alternatively, a downside break of July’s peak of 1.3223 could direct the pair towards the top marked in May, surrounding 1.3080.

However, the 1.3000 psychological magnet and the aforementioned short-term channel’s support line, close to 1.2990, could restrict additional declines in the USD/CAD pair.

Overall, USD/CAD bulls have limited room to cheer but the bears also have a tough road to regaining the market’s confidence. As a result, the quote is likely to grind higher.

USD/CAD: Daily chart

Trend: Limited upside expected