The 20 SMA is Keeping USD/CAD Bullish
Skerdian Meta • 1 min read
USD/CAD turned bullish after the first week of this year, following the tensions between US and Iran. The price had slipped below 1.30 at the end of December, with Crude Oil being bullish throughout that month as OPEC+ decided to curb production further, by placing additional output quotas.
But, the uptrend in Crude Oil stopped after tensions in the Middle East abated, since the US didn’t retaliate back after Iran attacked US military bases in Iraq. The demand for crude Oil declined and US WTI crude lost more than 13 cents this month. As a result, the CAD turned bearish also, pushing USD/CAD higher.
This pair pushed above all moving averages on the H4 chart as shown above. Moving averages turned into support after that, with the 100 SMA (green) doing so initially. Then, the 20 SMA (grey) took up that job, providing support and reversing the price higher last week. Yesterday we saw another pullback lower on the H4 chart, but the 20 SMA held strong once again and now the price is reversing back up again. So, as long as the price stays above the 20 SMA, USD/CAD will remain bullish.