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USD/CAD Rebounds Sharply; Key Resistance Ahead

USD/CAD 4H Chart 5/19

(click to enlarge)

Last week, USD/CAD rebounded from 1.1903 and it starting this week with a break above 1.2205, which puts in a price bottom. IT is now hanging around 1.2250, around the 200-period SMA in the 4H chart, and just under a falling trendline.

This is a very significant pullback as it pushed the 4H RSI above 60, which shows loss of the prevailing bearish momentum. The RSI pushed above 70, which shows revival of bullish momentum.

USD/CAD Daily Chart 5/19

(click to enlarge)

While the 4H chart shows that a break above 1.2250 could neutralize the bearish outlook, the daily chart shows that it will take a break above 1.2350 to open up a bullish one. Otherwise, if price holds under 1.2350, USD/CAD would still be bearish-neutral if not bearish, and the pressure would return towards the 1.1903 low on the year, or a more common support around 1.1950.