The USDCAD has been in an uptrend since early August, when the price encountered strong support at the 200-day simple moving average (SMA). Additionally, over the past few sessions, the technical picture has further improved with the price recording a new 22-month high at 1.3270 and currently trading above its upper Bollinger Band.

Momentum indicators also suggest that near-term risks are on the upside. Specifically, the Stochastic oscillator is sloping up into the overbought zone, while the MACD histogram has strengthened above zero and its red signal line.

If the buying interest intensifies further, the price could rise to test the psychological bar of 1.3300. By conquering this barricade, the bulls could then target the September 2020 resistance territory of 1.3420. Higher still, any further advance may then end at 1.3563 June 2019 resistance.

On the flip side, bearish stocks may encounter initial support at the previous high of 1.3222. By sliding below this floor, the pair could challenge the barrier of 1.3074, which has served as both resistance and support for the past few months. Failing to stop there, the support at 1.2960 could prove to be the next hurdle for the bears to overcome.

Overall, the USDCAD appears to have the momentum to push even higher and form new multi-year highs. Nonetheless, a downward correction cannot be ruled out as short-term oscillators indicate that the pair is approaching overbought levels.

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