The USD/CAD pair got some fresh bids near the 50-day SMA on Wednesday and rose to a high during the early North American session, reversing a significant portion of the modest decline overnight.
The bulls are now looking to extend the momentum beyond the 100-day SMA and may aim to challenge the upper boundary of the monthly uptrend channel, which is currently near the 1.3200-1.3210 region.
Meanwhile, technical indicators on the daily chart have gained positive direction and support prospects for a bullish breakout in the near term through the trend channel.
Some sequential buying after the 200-day SMA, around the 1.3235 region, may be seen as a major driver for bullish traders and set the stage for further upside in the near term.
The pair may then aim to test the 1.3250-70 supply zone before eventually pushing towards the next major hurdle near the 1.3300 mark, levels not seen since early December.
On the flip side, mid-1.3100 (50-day SMA) may continue to protect the immediate downside, which if broken will likely accelerate the slide towards 1.3130-25 support on its way to 1.3100 level.