USD/CAD technical analysis: Set-up seems tilted in favour of bullish traders, 1.3150 marks a key hurdle

• The USD/CAD pair did attempt a move beyond a key horizontal barrier on Tuesday, albeit bulls struggled to capitalize on the momentum.
• The pair now seems to have entered a consolidation phase and was seen oscillating in 20-25 pips narrow trading band just below mid-1.3100s.

Meanwhile, positive oscillators on hourly charts, coupled with the fact that the pair is holding comfortably above its important intraday moving averages – 50, 100 & 200-hour SMAs, support prospects for an eventual bullish breakout. 

However, a modest USD pullback from multi-week tops and a positive tone around Oil prices, which tend to underpin demand for the commodity-linked currency – Loonie, seemed to have held investors from placing any aggressive bullish bets.

Having said that, a convincing breakthrough the mentioned barrier, leading to a subsequent move beyond the overnight swing high – around the 1.3165 region, might now assist the pair to aim towards reclaiming the 1.3200 round figure mark.

The momentum could further get extended towards 50-day SMA resistance near the 1.3260 region, which if cleared might negate any near-term bearish bias and set the stage for an extension of the pair’s ongoing recovery move from yearly lows.

On the flip side, immediate support is pegged near the 1.3125 region and is closely followed by the 1.3100 handle, below which the pair might turn vulnerable and accelerate the slide further towards challenging the 1.3020-15 region.

USD/CAD 1-hourly chart