The USD/CAD pair is experiencing a surge, with bulls eyeing a 200-EMA breakout near 1.3770 ahead of the FOMC meeting. This upward momentum is fueled by a combination of factors, including geopolitical uncertainties, rising interest rate hike bets, and a modest pullback in Crude Oil prices. The US Dollar is finding support near a six-week high, while the Canadian Loonie is undermined by softer-than-expected consumer inflation figures. From a technical perspective, the pair has found acceptance above the 50% Fibonacci retracement level of the March-May downfall, and bulls await a sustained move beyond the 200-day Exponential Moving Average (EMA) resistance. The Relative Strength Index (RSI) is around 60, and a positive Moving Average Convergence Divergence (MACD) line suggests improving bullish momentum. However, the pair needs to clear the 200-EMA hurdle to unlock a more constructive bias, with potential targets at the 61.8% Fibo. level and the 78.6% retracement. On the downside, initial support is located at the 50.0% retracement, with further cushions at the 38.2% and 23.6% retracement levels. A deeper slide toward the 1.3549 anchor cannot be ruled out if the current floor fails. This technical analysis highlights the potential for further upside in the USD/CAD pair, with bulls eyeing a breakout near 1.3770. However, it's important to note that the market is dynamic and subject to change, and further analysis is required to make informed trading decisions.
