USD/CAD turned pretty bullish this month after being bearish in October. Crude Oil has been climbing higher in the last few weeks, which should have kept the CAD bullish as well, but the soft unemployment report from Canada last month hurt the sentiment surrounding the CAD.

As a result, this pair has climbed around 250 pips from the lows this month. During this time, moving averages have turned into support. The 100 smooth MA (red) provided resistance for some time and this pair retraced lower, but the 100 simple MA (green) held the decline and the uptrend resumed.

The 20 SMA (grey) used to provide solid resistance last month when USD/CAD was bearish, but this month the 20 SMA has turned into support as well. Although, the 20 SMA was broken last week, as this pair retraced lower on some increased USD weakness, which came after Powell’s comments.

But, the 200 SMA (purple) turned into support for this pair and the chart setup now points to a bullish reversal. The stochastic indicator is oversold, which means that the pullback is complete. the 200 SMA is providing support, while the last two candlesticks look like pins, which are reversing signals. We are already long on this pair, so this chart setup goes in our favour.