• Resurgent USD demand assisted USD/CAD to rebound swiftly from an ascending trend-line support.
• Technical indicators on hourly charts favour bullish traders and support prospects for further gains.
• Neutral oscillators on the daily chart warrant some caution before placing aggressive bullish bets.

Having shown some resilience below the 1.3100 mark, the USD/CAD pair rallied over 180 pips and shot to two-day tops on the back of a strong pickup in the US dollar demand.

A tighter than expected race in the US presidential election forced investors to hedge their positions and was seen as a key factor that provided a strong boost to the greenback. The USD/CAD pair witnessed a dramatic intraday turnaround from a support marked by a two-month-old ascending trend-line, which should now act as a key pivotal point for traders.

Meanwhile, technical indicators on hourly charts have again started moving into the positive territory and support prospects for an extension of the ongoing recovery move. That said, neutral oscillators on the daily chart haven’t been supportive of any firm near-term direction, warranting some caution before placing aggressive bullish bets.

Hence, any subsequent move up is more likely to confront a stiff resistance near the 1.3320 horizontal zone. This is followed by a descending trend-line hurdle, currently near the 1.3400 round-figure mark, which if cleared decisively will set the stage for a further near-term appreciating move. The USD/CAD pair might then aim to test the 1.3450-55 supply zone.

On the flip side, the 1.3200 round-figure mark now seems to protect the immediate downside. Failure to defend the mentioned support might turn the USD/CAD pair vulnerable to accelerate the slide back towards the 1.3130-25 region en-route the trend-line support. Sustained weakness below the 1.3100-1.3090 region will be seen as a fresh trigger for bearish traders.

The downward trajectory has the potential to drag the USD/CAD pair further towards the 1.3035 horizontal support before bearish traders eventually aim to challenge the key 1.3000 psychological mark.

USD/CAD DAILY CHART

Technical levels to watch