- USD/CAD staged a modest recovery from a near two-month-old ascending channel support.
- Bullish crude oil prices might underpin the loonie and cap any meaningful gains for the pair.
- A convincing break below the 1.2770-65 area will set the stage for a further near-term slide.
The USD/CAD pair staged a goodish bounce from a one-and-half-week low touched earlier this Tuesday and climbed to the 1.2800 mark during the first half of the European session.
From a technical perspective, the recent corrective slide from the YTD low found a decent support near the lower boundary of an upward sloping channel extending from late October. The mentioned support is currently pegged near the 1.2770-65 region, which should now act as a pivotal point for short-term traders.
Meanwhile, technical indicators on the daily chart – though have been retreating from higher levels – are still holding in the positive territory. This, in turn, supports prospects for additional gains. That said, bullish crude oil prices might continue to underpin the commodity-linked loonie and cap the USD/CAD pair.
Hence, any subsequent positive move is more likely to confront stiff resistance near the 1.2845-50 supply zone. A sustained strength beyond will reinforce the constructive set-up and prompt some near-term short-covering rally. The USD/CAD pair could then aim back to reclaim the 1.2900 round-figure mark.
The momentum could get extended towards the recent daily closing high, near the 1.2935-40 area, en-route the YTD high, around the 1.2965 region. Some follow-through buying will be seen as a fresh trigger for bullish traders and has the potential to lift the USD/CAD pair towards the key 1.3000 psychological mark.
On the flip side, a convincing break below the trend-channel support, around the 1.2770-65 region, could prompt aggressive technical selling and accelerate the slide towards the 1.2710-1.2700 zone. The corrective fall could further get extended towards the 50/100-day SMAs confluence, currently around the 1.2625-15 region.
USD/CAD daily chart
Technical 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 rebounds from session lows, stays below 1.0600
EUR/USD recovers from the session low it set in the European session but remains below 1.0600 on Tuesday. Although the US Dollar struggles to gather strength following disappointing housing data, the risk-averse market atmosphere caps the pair's rebound.
GBP/USD remains under pressure below 1.2650 after BoE Governor Bailey testimony
GBP/USD trades in the red below 1.2650 on Tuesday, pressured by safe-haven flows. BoE Governor Bailey said a gradual approach to removing policy restraint will help them observe risks to the inflation outlook but this comment failed to boost Pound Sterling.
Gold pulls away from weekly-high, holds above $2,600
Gold retreats slightly from the daily high it touched near $2,640 but holds comfortably above $2,600. Escalating geopolitical tensions on latest developments surrounding the Russia-Ukraine conflict and the pullback seen in US yields help XAU/USD hold its ground.
Bitcoin Price Forecast: Will BTC reach $100K this week?
Bitcoin (BTC) edges higher and trades at around $91,600 at the time of writing on Tuesday while consolidating between $87,000 and $93,000 after reaching a new all-time high (ATH) of $93,265 last week.
How could Trump’s Treasury Secretary selection influence Bitcoin?
Bitcoin remained upbeat above $91,000 on Tuesday, with Trump’s cabinet appointments in focus and after MicroStrategy purchases being more tokens.
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.