- USD/CAD consolidates gains for the last two previous sessions.
- Bulls face stiff resistance near the 1.2520-1.2550 zone.
- Momentum oscillator holds onto overbought zone with a neutral stance.
USD/CAD accumulates gains on Tuesday in the initial Asian trading session. The pair opened lower, however, recovered quickly and tested the intraday high of 1.2585.
At the time of writing, USD/CAD is trading at 1.2513, up 0.04% for the day.
USD/CAD daily chart
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On the daily chart, the USD/CAD pair has been moving in an upward direction since June 9 from the low of 1.2058, after a long consolidation phase.
The ascending trendline from the mentioned level acts as a defensive for the bulls.
If price sustained above the intraday’s high, it could move higher toward the 20-day Simple Moving Average (SMA) at 1.2543.
The Moving Average Convergence Divergence (MACD) indicator holds onto the positive territory. The reading suggests that there is room for further upside momentum.
A break and daily close above the ascending bullish slope line would encourage USD/CAD bulls to recoup the high of July 28 at 1.2604 followed by the 1.2650 horizontal resistance level.
Alternatively, if price moves lower, it could fall back to the 1.2450 horizontal support level.
A daily close below the mentioned level could mean more weakness in USD/CAD toward the 1.2400 horizontal support level.
The next area of support for the market participant would be the 6 July low of 1.2303.
