USD/CAD Price Analysis: Hits highest since Feb 2016, focus on weekly close
- USD/CAD rose to four-year highs during the overnight trade.
- A weekly close above 1.3793 is needed to invalidate a lower highs setup.
USD/CAD is currently trading at 1.3930, having hit a high of 1.3961 during the overnight trade. That was the highest level in over four years.
The daily MACD histogram, an indicator used to identify trend changes and trend strength, is currently reporting the strongest bullish bias since May 2016. To put it another way, bullish sentiment looks to have reached extremes and a pullback could be in the offing.
The pair may fall back to the psychological support at 1.29. Acceptance under that level would expose horizontal support at 1.3796.
The case for a pullback would weaken if the spot rises above the overnight high of 1.3961. That would shift the focus to 1.40.
Focus on the weekly close
A major bullish breakout on the weekly chart would be confirmed if the spot closes Friday above 1.3793 - a bearish lower high created in April 2017.
The 14-week relative strength index is reporting overbought conditions with an above-70 print. The indicator, however, would gain credence if and when signs of seller exhaustion emerge on the price chart.