USD/CAD Surges to 11-Week High: Can It Break Above 1.3946?

Summary:
• USD/CAD rises toward 1.3946, hitting an 11-week high. Can the pair sustain its bullish momentum or face resistance?

The USD/CAD pair shows strong bullish momentum, trading near the 1.3946 level—a critical resistance that has not been breached for the past 11 weeks.

USD/CAD Resistance Levels

• 1.3946 is the immediate and crucial resistance, marking the recent high that bulls are targeting.
• A breakout above 1.3946 could pave the way toward the next resistance at 1.3887, indicating further bullish momentum.

USD/CAD Support Levels

• The 20-day EMA at 1.3786 provides initial support if the pair retreats from current levels.
• The 50-day EMA at 1.3701 offers deeper support, aligning with previous consolidation levels.
• The 1.3710 support level serves as a strong barrier against potential bearish reversals.

Factors Driving USD/CAD’s Price Action

The surge in the USD/CAD is driven by various factors, such as increasing yield spreads benefiting U.S. bonds and expected monetary policy loosening by the Bank of Canada.

The loonie could experience more selling pressure as the Canadian central bank hints at a possible rate cut of as much as 50 basis points.

The US dollar is experiencing positive effects from robust economic indicators and increased demand for safe-haven assets due to geopolitical tensions, which is fueling the pair’s rise.

Conclusion

The USD/CAD is like a determined sprinter racing towards the 1.3946 resistance—it’s fast and driven, but can it maintain this pace and breakthrough? If it does, it could set new highs. But if sellers return to the track, the pair might pull back to catch its breath at 1.3786. Either way, traders should stay alert because this race is far from over!