- USD/CAD struggled to capitalize on the overnight bounce and met with a fresh supply on Tuesday.
- The technical set-up supports prospects for an extension of the recent pullback from a one-year high.
- Bears, however, might wait for a convincing break below the 1.2600 mark before placing fresh bets.
The USD/CAD pair struggled to capitalize on the previous day's goodish rebound from the vicinity of the 1.2600 mark, or a one-month low and met with a fresh supply on Tuesday. The pair maintained its offered tone through the first half of the European session and was last seen trading just below mid-1.2600s.
From a technical perspective, the USD/CAD pair, so far, has managed to hold its neck above confluence support comprising of 100-day SMA and the 50% Fibonacci level of the 1.2288-1.2964 move up. This is closely followed by the overnight swing low, which if broken will be seen as a fresh trigger for bearish traders.
Given that oscillators on the daily chart have started gaining negative traction, a convincing break below will set the stage for an extension of the recent pullback from a one-year high set in December. The USD/CAD pair might then accelerate the fall to the 1.2540 area (61.8% Fibo.) en-route the key 1.2500 psychological mark.
On the flip side, the overnight swing high, around the 1.2700 mark, which coincides with the 38.2% Fibo. level, now seems to act as an immediate strong barrier. Some follow-through buying might push spot prices towards the 1.2755-60 horizontal resistance, above which bulls could aim to conquer the 1.2800 mark.
The latter also represents the 23.6% Fibo. level hurdle and should act as a key pivotal point for traders. A sustained strength beyond might negate any near-term negative bias and trigger a short-covering move, which might push the USD/CAD pair towards the next relevant hurdle near the 1.2860 horizontal zone.
USD/CAD daily chart
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 regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold climbs above $2,340 following earlier drop
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.