On January 19th analysis on USDCAD we noted that a bounce towards 1.2630 was justified and expected as the 4 hour chart was giving us bullish signs. Despite still inside the bearish channel, the price action and the bullish divergence by the RSI suggested that bounce higher was imminent.
USDCAD has reached the horizontal resistance area around 1.2630. This area was once support and is now resistance. After the double bottom at 1.2450 and the bullish RSI divergence, price has bounced strongly higher challenging the short-term trend to change from bearish to bullish. It is imperative for bulls to start forming higher highs and higher lows if they are to take control of the trend.