Loonie bulls need validation from 1.3390 and US/Canada employment data

• USD/CAD grinds near three-week high as key US, Canada data looms, clings to 50-EMA hurdle.
• Bullish MACD signals, upbeat RSI favors Loonie pair buyers to cross immediate EMA resistance but 200-EMA can prod the bulls.
• Four-month-old descending resistance line appears the last defense of bears.
• Previous resistance line from November 2022, short-term rising trend line limits immediate downside.

USD/CAD bulls take a breather around the highest levels in three weeks, after rising the most in 1.5 months the previous day, as it flirts with the 50-Exponential Moving Average (EMA) hurdle amid Friday’s Asian session. That said, the Loonie pair seesaws around 1.3365-70 as markets turn cautious ahead of the top-tier US and Canada employment figures.

Also read: USD/CAD soars to multi-week highs amid hawkish bets on the Fed

It should be noted that the Loonie pair’s upside break of an ascending resistance line stretched from November 2022, now immediate support near 1.3340, joins the bullish MACD signals and upbeat RSI (14) line, not overbought, to keep buyers hopeful of crossing the nearby hurdle of 1.3365.

However, the 200-EMA surrounding 1.3390 appears a major problem for the USD/CAD pair’s further upside.

In a case where the USD/CAD manages to cross the 1.3390 hurdle, also the 1.3400 round figure, it can aim for the 38.2% Fibonacci retracement of its October 2022 to June 2023 downturn, near 1.3445.

Following that, a downward-sloping resistance line from March, near 1.3520 at the latest, will be crucial to watch for clear directions.

On the contrary, a downside break of the resistance-turned-support line, around 1.3340 at the latest, can recall the intraday sellers.

Even so, a one-week-old rising support line near 1.3260 will prod the USD/CAD bears before directing them to the multi-month low marked in the last week around 1.3115.

USD/CAD: Daily chart

Trend: Limited upside expected