USD/CAD feeling tired again near 38.2% fib resistance

Omkar Godbole FXStreet Contributor

The USD/CAD pair is looking tired as it trades just a few pips short of 1.3209, which is 38.2% Fibonacci retracement of the Trump rally.

A look at the daily chart tells us that the spot has failed twice – Feb 7 & Feb 22 – this month at 1.309 levels. What’s worth noting is that even the 50-DMA is now positioned at 1.3209 levels.

CAD under pressure despite range bound oil prices

Monday’s rally in the USD/CAD pair from 1.3083 to 1.3181 contradicts the range bound action in the oil prices. Moreover, oil benchmarks have been restricted to a narrow range amid the tug of war between OPEC and US Shale.

The focus today is on the Trump speech to congress. Trump trade is at a risk of fizzling out if POTUS keeps mum on the details of the fiscal policy. However, CAD may under perform as unwinding of the Trump trade could also weigh over oil and other commodity prices.

USD/CAD Technical Levels

The spot was last seen trading around 1.3185. A break above 1.3209 (38.2% fib + 50-DMA) would expose 1.3236 (Dec 5 low) and 1.3272 (100-DMA). On the other hand, a breakdown of support at 1.3175 (session low) could yield a sell-off to 1.3144 (5-DMA + 200-DMA), under which a major support is seen at 1.3083 (Monday’s low).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Neutral	Expanding
1H	Bullish	Neutral	Shrinking
4H	Bullish	Neutral	Expanding
1D	Bearish	Neutral	Low
1W	Bearish	Neutral	High
Updated Feb 23, 22:00 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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