USD/CAD Price Analysis: Bounces off two-week low, finds some support near 50% Fibo.

USD/CAD dropped to over a two-week low on Monday amid heavy USD selling bias.
Modest pullback in oil prices undermined the loonie and helped limit the downside.
Recovery beyond the 1.2800 mark might confront resistance near the 38.2% Fibo.

Haresh Menghani FXStreet

The USD/CAD pair came under some renewed selling pressure on Monday and dropped to over a two-week low, around the 1.2770 region amid broad-based US dollar weakness. That said, a modest intraday pullback in crude oil prices undermined the commodity-linked loonie and helped limit any further losses, at least for the time being.

The USD/CAD pair was last seen trading just a few pips below the 1.2800 round-figure mark, still down nearly 0.40% for the day and remains at the mercy of the USD price dynamics.

From a technical perspective, bulls, so far, have managed to defend the 50% Fibonacci retracement level of the 1.2459-1.3077 strong move up. The said support should now act as a pivotal point, which, if broken decisively, will set the stage for an extension of the recent sharp pullback from the highest level since November 2020.

The USD/CAD pair might then accelerate the downfall towards testing intermediate support near the 1.2720-1.2715 region before eventually dropping to sub-1.2700 levels, or the 61.8% Fibo. level. The latter coincides with the 100-day SMA and is followed by the very important 200-day SMA, around the 1.2660-1.2665 zone.

Some follow-through selling would suggest that the USD/CAD pair has topped out in the near-term and prompt fresh technical selling. The subsequent decline has the potential to drag spot prices further towards the 1.2600 mark en-route the next relevant support near the 1.2560 horizontal zone.

On the flip side, attempted recovery back above the 1.2800 mark might now confront stiff resistance near the 38.2% Fibo. level, around the 1.2835-1.2840 region. Sustained strength beyond might trigger a short-covering bounce and allow bulls to reclaim the 1.2900 mark, though any further positive move seems elusive.

USD/CAD daily chart

Key levels to watch

USD/CAD

Overview
Today last price	1.2794
Today Daily Change	-0.0046
Today Daily Change %	-0.36
Today daily open	1.284

Trends
Daily SMA20	1.2872
Daily SMA50	1.2699
Daily SMA100	1.2694
Daily SMA200	1.266

Levels
Previous Daily High	1.2868
Previous Daily Low	1.2776
Previous Weekly High	1.2982
Previous Weekly Low	1.2776
Previous Monthly High	1.288
Previous Monthly Low	1.2403
Daily Fibonacci 38.2%	1.2833
Daily Fibonacci 61.8%	1.2811
Daily Pivot Point S1	1.2788
Daily Pivot Point S2	1.2736
Daily Pivot Point S3	1.2696
Daily Pivot Point R1	1.288
Daily Pivot Point R2	1.292
Daily Pivot Point R3	1.2971

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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