• USDCAD snaps long-term resistance line

• Short-term bias bullish; overbought signs detected

• A clear close above 1.3700 required for more upside

USDCAD is fighting for a close above the descending line at 1.3700, which connects all the highs from the 2020 top, for the first time since its failed attempt to reach it in early September.

The pair has extended its impressive rebound above the 1.3700 mark with scope to reach the 1.3800-1.3860 key resistance territory. A bounce higher could clear the way towards the 2022 high of 1.3976, while the 1.4000 round level could also come into consideration in this case.

Some profit-taking, however, cannot be ruled out as the RSI and the stochastic oscillator are already flirting with their previous highs in the overbought zone.

A slide below 1.3700 could shift the attention back to the simple moving averages (SMAs), which are all placed within the 1.3550-1.3450 region. The short-term ascending trendline drawn from July’s lows could also protect the market within the same territory. Then, the almost flat line coming from October 2022 at 1.3390 could prevent an extension towards the upper band of the broken bearish channel at 1.3320.

Summing up, USDCAD has established an important rally today. If it holds its footing above the critical 1.3700 level, the upward pattern could gain more legs.