USDCAD extended its rally to 1.2779 on Tuesday. The upside momentum remains strong after the tenkan-sen crossed above the kijun-sen line and there is scope to target the 6-year high of 1.2834 hit on March 18. After falling to a low of 1.2126 on June 18 prices moved back above the Ichimoku cloud. This is also supporting the bullish bias. RSI is in bullish territory but is just about to enter overbought conditions after crossing above the 70 line so we could expect some consolidation in the near term.
A break below minor support at 1.2535 could turn the bias back to the downside and bring the trend back to neutral in the medium term. We would need to see a decisive break above 1.2834 to confirm the uptrend that was in progress from the low of 0.9630 in September 2012.
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