• USD/CAD drops from weekly highs above 1.3700 on sentiment improvement.
• The USD/CAD fall was capped by sellers unable to crack the 20-day EMA.
• USD/CAD Price Analysis: For a bearish resumption, the USD/CAD needs a daily close below 1.3661.

USD/CAD is erasing last Friday’s gains, hovering at around the 20-day Exponential Moving Average (EMA) at 1.3661 after hitting a daily high of 1.3746. A risk-on impulse on news that UBS bought Credit Suisse calmed tensions amidst turbulence in the banking system. Therefore, the USD/CAD exchanges hands at 1.3676, down 0.41%.

USD/CAD Price action

After peaking at 1.3862 ten days ago, the USD/CAD resumed its downtrend amidst overall US Dollar (USD) weakness. However, it should be said that the 20-day EMA has acted as a solid support, so for a bearish resumption, the USD/CAD must register a daily close below 1.3661.

Oscillators portray sellers gathering momentum, though the Relative Strength Index (RSI) needs to punch below the 50-midline, to further confirm a bearish continuation. Contrarily, the Rate of Change (RoC) indicates selling pressure increased. Therefore, the USD/CAD might test lower prices in the near term.

The USD/CAD first support would be the 20-day EMA at 1.3661, followed by the March 14 low at 1.3651. Break below, and the USD/CAD could tumble to 1.3600 before testing the 50-day EMA at 1.3570. Once cleared, the 100-day EMA at around 1.3500 would be challenged.

On the flip side, the USD/CAD first resistance would be the 1.3700 figure. A breach of the latter will expose the daily high at 1.3746, followed by 1.3800 and the last week’s high at 1.3814.

USD/CAD Daily chart

USD/CAD Technical levels