USD/CAD reaches critical pivot point
The USD/CAD has been rising recently, trading around 1.37. This is an important level, as the last time it reached this point, back at the beginning of February, it stalled and returned to the lows around 1.35. Now, with USD/CAD pushing into the 1.37 region again, it could trade higher, which would signal that the Canadian dollar is weakening against the US dollar.
Double bottom pattern in focus
Looking at USD/CAD, it appears to have formed a double-bottom pattern. If so, the pair is now at the neckline and would simply need to rise above resistance at 1.37 to confirm a breakout. That could open the door to a potential move higher towards 1.39, an exchange rate last seen in late January.
Momentum signals still developing
Momentum, as measured by the Relative Strength Index, appears to be turning higher, indicating improving bullish momentum. However, it has not yet broken above its downtrend. Therefore, the USD/CAD bullish pivot still has more work to do.
Key level for the medium to long term
If USD/CAD fails to break above resistance at 1.37 and the RSI fails to build further bullish momentum, the pair is likely to give back its recent gains. That could see fall back to the lows just below 1.35. This makes the current area of resistance for particularly important, especially over the medium- to long-term.
