USDCAD

The USDCAD extended the bullish rally. The currency pair surged to a fresh multi-year high of 1.4223. Although bullish momentum remains strong, the pair is overextended on the lower timeframe, raising concerns about the rally's sustainability and the potential for a pullback.

Key Indicators

• Technically, upward momentum continues, but further gains may be limited. High-timeframe analysis suggests a potential pullback if the pair fails to sustain its upward trend. Despite the strong bullish momentum, the Relative Strength Index (RSI) has risen above 85 on the daily chart, indicating the pair is extremely overbought. This suggests a short-term decline may be imminent after this strong upside move.

Fundamental Context

For the rest of the week, the main drivers for the USDCAD remain the movement of the US dollar, Fed policymakers' comments, geopolitical tensions, and May US core PCE numbers.