USD/CAD recaptures 200-DMA amid falling WTI prices, risk-aversion
|- USD/CAD hits fresh three-month highs near 1.2650.
- Risk-off mood amid covid woes boosts DXY, OPEC+ deal knocks off WTI.
- The loonie recaptures 200-DMA, further upside remains in the offing.
USD/CAD is flirting with three-month highs near the midpoint of the 1.2600 level, as the bulls remain unstoppable amid three consecutive days of gains this Monday.
The currency pair receives support from two fronts, the first with the US dollar rising higher on the risk-aversion wave, thanks to the rising Delta covid variant cases worldwide.
On the other side, WTI prices tumble over 1% to breach $71 after OPEC and its allies (OPEC+) struck a deal over the weekend to boost oil supplies, in order to stem the price surge. The fall in oil prices dent the sentiment around the resource-linked WTI.
Looking forward, the broader market sentiment will remain the main market motor amid a lack of relevant economic news while covid and inflation fears continue to loom.
USD/CAD technical outlook
USD/CAD’s daily chart shows that the recent uptrend has prompted the rates to recapture the slightly bearish 200-Daily Moving Average (DMA) at 1.2625.
The 14-day Relative Strength Index (RSI) is holding firmer, currently probing the overbought region, suggesting that there is more room for the upside.
If the bulls manage to hold ground at higher levels, a fresh advance towards the horizontal (orange) trendline resistance at 1.2705 cannot be ruled.
Ahead of that, the pair need a firm break above the 1.2657, April highs.
USD/CAD daily chart
On the flip side, the 200-DMA – earlier resistance now support could limit the pullback, below which the 1.2600 round number could guard the downside.
The next significant support awaits at Friday’s low of 1.2561.
USD/CAD additional levels to watch
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