Yesterday’s daily close above the 2015 high at 1.3454 has added to bullish price momentum in USD/CAD, according to George Davis, Chief FIC Technical Analyst at RBC Capital Markets.
Davis says valuations should not present a major headwind to additional gains because the daily and weekly studies are displaying upward momentum from neutral levels. The next significant resistance level is at 1.3597, which is the 61.8% Fibonacci retracement of the 2002 to 2011 decline, and beyond this there is little resistance until 1.3815.
On the downside, the prior high of 1.3454 will now serve as support, along with 1.3303, and Davis thinks both these levels should attract buying interest.
Given his core bullish view, Davis’s one to three month technical price target for USD/CAD is 1.3600, with the 2004 high of 1.4001 starting to come into view.