USD/CAD Price Analysis: Upside appears limited amid bearish technical setup
|- USD/CAD stalls the recovery attempt just shy of the 1.2500 mark.
- US dollar weakens while WTI recaptures the $80 mark
- Four-hourly chart points to an additional downside while below 21-SMA.
USD/CAD has stalled its rebound from three-month troughs of 1.2446, as sellers return amid a pullback in the US dollar and a fresh uptick in oil prices.
The US oil is resuming its upside while recapturing the $80 mark while the greenback pulls back from near yearly tops despite the risk-off market profile.
The oil price action will be closely followed for fresh trading opportunities in the resource-linked loonie, as the main event risk remains the US inflation data due this Wednesday.
Looking at USD/CAD’s four-hour chart, the pair has failed to clear the 1.2500 mark on the road to recovery, leaving the rates consolidating in a tight range.
If the downside pressure intensifies, then the pair could drop back towards the multi-month lows of 1.2446.
Further south, the bulls will challenge the bearish commitments at 1.2396, which is the falling trendline support on the said time frame.
The Relative Strength Index (RSI) points lower below the midline, suggesting that there is room for additional decline.
USD/CAD: Four-hour chart
On the flip side, acceptance above 1.2500 will trigger a fresh advance towards the bearish 21-Simple Moving Average (SMA) at 1.2509.
The next relevant upside target for the buyers is seen at 1.2550, the psychological magnate.
USD/CAD: Additional levels
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