USDCAD recouped some lost ground to re-challenged the upper boundary of a tight bearish channel in the four-hour chart following the slide to a new 15-year high of 1.3115 earlier today.

Despite the positive slope in the technical indicators, the RSI has yet to pierce through its 50 neutral mark, whilst the MACD remains attached to its red signal line, reflecting some persisting skepticism in the market.

Traders would like to see a bullish break above the channel and the 50-period SMA at 1.3185 before they target the 1.3235 constraining zone. A successful penetration higher and beyond the June 20 peak of 1.3270 could lift the price towards the all-important 1.3340 zone. The 50% Fibonacci retracement of the 1.4667-1.2006 downtrend and the long-term constraining resistance line from November 2022 are both located in the same region.

On the downside, sellers could take full control if the 1.3115 floor collapses, squeezing the price towards the channel’s lower boundary and the 38.2% Fibonacci of 1.3028. The long-term support trendline from June 2021 could be a critical region to watch around 1.2980, while slightly lower, the 1.2952 level taken from September 2022  could provide another opportunity for a rebound,

In brief, USDCAD is currently testing an important resistance area at 1.3185. A close above this bar could raise buying interest, though only a successful recovery above 1.3270 would signal a bullish trend reversal in the short-term picture.