**USD/CAD Extends Three-Day Rally, Eyes Return to 1.3600 as Bullish Momentum Builds**
*Based on Analysis by ActionForex. Expanded and adapted with additional technical insight and market context.*
The USD/CAD currency pair has continued its upward trajectory over the past three sessions, pushing back to the coveted 1.3600 level as bullish sentiment regains dominance. Following a period of consolidation earlier this month, the pair has reestablished upward momentum, fueled by renewed demand for the U.S. dollar and mixed signals from the Canadian economy. This technical rebound has attracted trader interest, particularly as it occurs near critical trendlines that may shape future price action.
Below is an in-depth technical and fundamental analysis of the USD/CAD pair as of late April 2024, with insights drawn from the original ActionForex article and supplemented by broader market data and expert commentary.
## USD/CAD Overview: Key Drivers of Recent Price Action
The pair’s gains come amid several interwoven developments across economic indicators, central bank policy shifts, and broader risk appetite trends. The latest bullish moves are seen as a reaction to:
– Robust U.S. economic fundamentals supporting dollar strength
– Weakening Canadian economic data placing pressure on the loonie
– Diverging monetary policy expectations between the Federal Reserve and the Bank of Canada
– Crude oil volatility, a major driver for CAD movement
– Technical chart support at key moving averages
These dynamics have contributed to the USD/CAD pair bouncing strongly from its recent lows near 1.3530 and targeting a retest of February and March resistance zones.
## Technical Analysis: USD/CAD Back on the Ascendancy
The three-day climb in USD/CAD brings the pair from the short-term support zone at 1.3530 back to the 1.3600 handle, an area of prior resistance during the first quarter of 2024.
### Price Structure Analysis
– After two weeks of consolidation and subtle downward drift, bulls regained control at the 38.2% Fibonacci retracement level of the rally from March lows near 1.3440 to the April highs around 1.3700.
– This Fibonacci zone (1.3530–1.3550) coincided with prior horizontal support and the 55-day Exponential Moving Average (EMA), now acting as a dynamic floor.
– Sustained closes above this zone signal that buyers are defending prior breakouts and maintaining long positions in anticipation of continued dollar strength.
### Key Technical Levels
– **Immediate Resistance:** 1.3600 remains the initial hurdle as it marked intraday peaks earlier in April.
– **Next Resistance Zone:** Beyond this, the price could challenge 1.3665, followed by the yearly high at 1.3705.
– **Support Levels:**
– Immediate support lies at 1.3550, followed by the 38.2% Fib level at 1.3530.
– A break below could expose 1.3490 and potentially trigger a more extensive correction.
### Moving Average Confluence
– The 20-day SMA and 55-day EMA have begun flattening, suggesting the potential for the next directional move as consolidation tightens.
– A bullish crossover, if confirmed in the coming sessions, could reinforce the bullish case.
### Momentum Indicators
– RSI is hovering around 55–58, reflecting a moderate bullish bias without signaling overbought conditions. This provides room for continued upside in the short term.
– MACD stands just above the zero line, with histogram bars starting to grow again, adding to the positive momentum.
## Broader Market Context Supporting USD Strength
### 1. U.S. Dollar Index Rally
– The U.S. Dollar Index (DXY) has shown resilience, rebounding from the 104.00 level and trading closer to 105.50 as of late April.
– A combination of firm labor market data, sticky
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