The USDCAD followed the dollar higher despite the strong crude oil which can benefit the CAD – lower USDCAD. The market is ignoring that effect and focusing on the USD buying.
The pair was given a technical boost on the break above the up and down swing area (see red box) that has confined the pair’s trading range since January 26.
Getting above 1.27958 gave buyers the go-ahead to push more to the upside. Momentum buying took the price up to a high of 1.28466. That level tested the last swing high from December 27. It is also reached the low of a swing area that extends up to 1.2857.
Sellers can lean against that swing area between 1.2846 and 1.2857 with a stop on a break above the 1.2857. Break above that level and the price starts to trade in the extreme area from December up to 1.29624.
Although there may be a reason for a stall against resistance, the breakout today is still significant from a technical perspective. It would now take a move below the January 6 high at 1.28128 followed by a move below the January 28 high at 1.279582 to spoil the bullish party for the buyers. Absent that, and the buyers are still holding onto the control.
