USD/CAD has been on a bullish trend since March, after surging 15 cents higher in the previous few weeks. There have  been three reasons for the decline in USD/CAD, which has lost around 17 cents from top to bottom during this time, with the main reason being the tumble in the USD.

The second reason is the improving sentiment for risk assets such as commodity dollars, while the third reason is the bullish trend in crude Oil since April. USD/CAD fell below 1.30 on Tuesday morning, but then reversed back up that same day and closed at around 1.3070.

So, the break of 1.30 didn’t count and the price formed a small hammer candlestick on the daily chart down there, which is a bullish reversing signal. But, buyers ran into the 100 SMA (green) in the afternoon, which was keeping the price below since then.

Although, that moving average was broken eventually a while ago, as the USD attracted another wave of fresh bids, after the ADP employment report, which missed expectations. So now, the road is open for buyers to push to the 200 SMA (grey) which is standing 50 pips higher.