- A combination of supporting factors assisted USD/CAD to regain positive traction on Monday.
- Sliding crude oil prices undermined the loonie and extended support amid modest USD strength.
- The technical set-up favours bullish traders and supports prospects for additional near-term gains.
The USD/CAD pair held on to its strong intraday gains through the early North American session and was last seen trading around the 1.2610 region, near the multi-week high touched on Friday.
Crude oil prices dropped to the lowest level since March 17 and undermined the commodity-linked loonie. This, in turn, was seen as a key factor that offered some support to the USD/CAD pair amid the underlying bullish sentiment surrounding the US dollar. Despite the supporting factors, bulls, so far, have struggled to make it through the very important 200-day SMA. The said barrier has been capping the USD/CAD pair over the past three trading sessions and coincides with a descending tren-line support breakpoint.
Oscillators on the daily chart have just started gaining positive traction and support prospects for an eventual breakout through the aforementioned confluence. The USD/CAD pair could then climb to mid-1.2600s, or the 50% Fibonacci level of the 1.2901-1.2403 fall. Some follow-through buying will suggest that the USD/CAD pair has formed a temporary bottom near the 1.2400 mark and pave the way for additional gains. The momentum could then push spot prices towards the 1.2700 mark en-route the 61.8% Fibo. level, around the 1.2715 region.
On the flip side, the 1.2555 region now seems to protect the immediate downside ahead of the 23.6% Fibo. level, around the 1.2525 region. A convincing breakthrough, leading to subsequent weakness below the 1.2500 psychological mark, will shift the bias in favour of bearish traders. The USD/CAD pair would then turn vulnerable to slide back to challenge the YTD low, around the 1.2400 mark, with some intermediate support near the 1.2465 zone.
USD/CAD daily chart
-637852812898792083.png)
Key levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD ticks higher after discouraging US Retail Sales
EUR/USD keeps trading around the 1.0500 mark in the American session on Tuesday. A negative shift in risk sentiment revived the haven demand for the US Dollar earlier in the day, while tepid US Retail Sales figures put near-term pressure on the Greenback.
GBP/USD trims intraday gains and trades sub-1.2700
GBP/USD gave up early gains and trades pretty flat on the day. The data from the UK showed that the ILO Unemployment Rate held steady at 4.3% in the three months to October, while the annual wage inflation climbed to 5.2%. Poor US Retail Sales limit US Dollar demand.
Gold under pressure around $2,640
Following Monday's shallow recovery attempt, Gold remains under modest bearish pressure and trades below $2,650 on Tuesday. Growing expectations for a less dovish Fed outlook and elevated US bond yields weigh on XAU/USD ahead of the last FOMC meeting of the year.
BTC extends upside above $107K as Microstratergy and Riot expand Bitcoin holdings
Bitcoin (BTC) price trades in green, trading above $107,000 on Tuesday after reaching a record level of $107,793 the previous day. The recent rally in BTC is supported by corporations like MicroStragerty and Riot Platforms, which added more BTC to their holdings.
Will the Fed cut interest rates again and why is the dot plot important Premium
The Fed is expected to cut interest rates on Wednesday for the third consecutive meeting. Every time the Fed decides on rates, it is a crucial event as it directly affects families and businesses in the United States. Moreover, the Fed’s last meeting of the year will also be important because it will provide the outlook for what it expects to do in 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.