USD/CAD Price Analysis: Bounces-off multi-day lows, eyes acceptance above 21-DMA

USD/CAD bounces from nine-day lows to recapture the 1.2800 mark.
The pair is rescued by the broad rebound in the US dollar amid light trading.
Bulls remain hopeful while above this critical daily support line.

Dhwani Mehta FXStreet

USD/CAD is staging a solid comeback from nine-day lows of 1.2770, helped by a sharp corrective upside in the US dollar and weaker oil prices.

The greenback is extending the recovery from monthly lows against its major peers, mainly driven by profit-taking ahead of the New Year Eve celebrations.

Meanwhile, a pullback in WTI prices from higher levels also collaborates with the renewed upside in the CAD pair.

Traders now look forward to the US Jobless Claims data for fresh trading impulse but the risk trends and year-end flows will remain the main market drivers.

Looking at USD/CAD’s daily chart, the price has recaptured the critical 21-Daily Moving Average (DMA) at 1.2802, although needs a daily closing above the latter to confirm a bullish reversal from weekly troughs.

If that happens, bulls will then flex their muscles towards the next upside barrier, located at 1.2850. Further up, a rally towards the 1.2900 round number cannot be ruled out.

The fact that the pair trades above all the major DMAs is supportive of the bullish potential. To add, the 14-day Relative Strength Index (RSI) is trading above the midline, pointing to more gains in the making.

USD/CAD: Daily chart

On the flip side, a sharp sell-off towards the December 13 lows of 1.2706 could kick in should the horizontal support line at 1.2770 gets breached on a daily candlestick closing basis.

Further south, the confluence of the upward-sloping 50-DMA and December 9 lows of 1.2648 will be a tough nut to crack for sellers.

USD/CAD: Additional levels to consider

USD/CAD

Overview
Today last price	1.2806
Today Daily Change	0.0009
Today Daily Change %	0.07
Today daily open	1.2797

Trends
Daily SMA20	1.2802
Daily SMA50	1.264
Daily SMA100	1.2624
Daily SMA200	1.2497

Levels
Previous Daily High	1.2835
Previous Daily Low	1.2788
Previous Weekly High	1.2964
Previous Weekly Low	1.2786
Previous Monthly High	1.2837
Previous Monthly Low	1.2352
Daily Fibonacci 38.2%	1.2806
Daily Fibonacci 61.8%	1.2817
Daily Pivot Point S1	1.2778
Daily Pivot Point S2	1.276
Daily Pivot Point S3	1.2732
Daily Pivot Point R1	1.2825
Daily Pivot Point R2	1.2853
Daily Pivot Point R3	1.2872

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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