• USD/CAD struggles for clear directions after rising the most in 13 months.
• Double tops around 1.3200 challenge buyers, 50-DMA restricts downside.
• Sluggish MACD signals further grinding, rising trend line from early June favors bulls.

USD/CAD treads water around 1.3160, after rising the most since August 2021 the previous day, as traders seek fresh clues during early European morning on Wednesday.

In doing so, the Loonie pair fades bounce off the 50-DMA, marked the previous day, amid sluggish MACD signals. Also challenging the USD/CAD bulls is the double top around 1.3200.

That said, the quote’s pullback hinges on a clear downside break of the 23.6% Fibonacci retracement level of June-July advances, around 1.3055.

Following that, a convergence of the 50-DMA and the 38.2% Fibonacci retracement level can challenge the USD/CAD bears near 1.2960-55.

It’s worth noting, however, that the pair’s downside past 1.2955 could direct bears towards the 50% Fibonacci retracement level and the 3.5-month-old upward sloping support line, close to 1.2870 and 1.2830 in that order.

On the flip side, a daily closing beyond the 1.3200 level becomes necessary for the USD/CAD bulls to challenge the yearly high marked in July at around 1.3225.

In a case where the USD/CAD pair remains firmer past 1.3225, the odds of witnessing a run-up towards the October 2020 high near 1.3390 can’t be ruled out.

USD/CAD: Daily chart

Trend: Further upside expected