The USDCAD is up for the 4th consecutive day after bottoming on Wednesday at 1.25166. Since then, the price has stepped higher reaching a high today of 1.2875. That's a move of 359 pips from low to high in less than 4 trading days.
Looking at the hourly chart, the price high today stalled in the middle of a swing area that has seen a number of swing highs and lows going back to April 28 (see red numbered circles). From May 6 until May 16, the price traded above that swing area, but since then there have been a number of tests of the area only to have sellers leaning (see red numbered circles 13 through 18). I would expect that if the price moved above 1.25949, there would be stops and more upside momentum.
For now, the pairs return to that area has given traders some cause for pause as risk can be defined and limited. Stay below and we could see a rotation back down with the 50% midpoint of the range since May 12 as the target at 1.27963. There is also a swing area between 1.27623 and 1.27827.
Conversely, if the price squeezes above 1.2895, I would expect more buying with traders looking toward 1.29496 to 1.29607 as the next upside target area.
