- USD/CAD consolidates gains for the last two previous sessions.
- Bulls face stiff resistance near the 1.2580-1.2620 zone.
- Momentum oscillator trades with a neutral stance adopts the wait-and-watch approach.
USD/CAD accumulates gains on Monday in the 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 1.2580, up 0.15% for the day.
USD/CAD daily chart
On the daily chart, the USD/CAD pair has been moving in an upward direction since June 10 from the low of 1.2070, after a long consolidation phase.
If price remains above the lower ascending trendline of the channel, it could further move higher towards the 1.2650 horizontal resistance level.
The Moving Average Convergence Divergence (MACD) indicator holds onto the positive territory with a neutral stance. It signifies that there is plenty of room for the higher price action in the pair.
Next, the USD/CAD bulls would aim to recoup the July 21 high at 1.2730 followed by the high of July 19 at 1.2807.
Alternatively, if price breaks the bullish sloping line, it could fall back to the 1.2530 horizontal support level.
A daily close below the 20-day Simple Moving Average at 1.2509 could mean more weakness in USD/CAD toward the 1.2450 horizontal support level.
The next area of support for the market participant would be the 1.2400 horizontal support level.