Bullish Sign in USD/CAD After the Break Above the 20 SMA

At the end of last month, USD/CAD slipped below the 20 moving average (gray) on the H4 chart. On that day, the price reached a high that encountered resistance near the March 26 high of approximately 1.36539. Subsequently, over the following, the price experienced consecutive declines. This bearish price action led USD/CAD falling to a low of 1.3313 last Friday, which coincided with the low recorded on May 8 at 1.33132. Essentially, the entire upward move from the May low was retraced. However, the price found support at that level and rebounded before the market closed, with the closing price at 1.33375.

During today’s trading session, the price initially saw a slight increase in the Asian session before reversing back down and retesting the support level at 1.3313 once again. This support level held on two separate hourly bars today, as the price returned around the ascending trend line. The inability to move below that level provided buyers with a reason to push the price higher above the 20 SMA and gave sellers an opportunity to cover their short positions, sending this pair even higher.