USD/CAD Price Analysis: Bullish potential intact, seems poised to reclaim 1.3000 mark

USD/CAD shot to a fresh YTD high on Monday, albeit struggled to capitalize on the move.
Last week’s breakout through a descending trend-line supports prospects for further gains.
Any meaningful pullback could still be seen as a buying opportunity and remain limited.

Haresh Menghani FXStreet

The USD/CAD pair gained positive traction for the third successive session and climbed to a fresh YTD peak, around the 1.2950-1.2955 region on the first day of a new week.

Retreating crude oil prices undermined the commodity-linked loonie and turned out to be a key factor that acted as a tailwind for the USD/CAD pair. That said, modest US dollar pullback from a two-decade high touched earlier this Monday capped gains and forced spot prices to retreat around 30 pips from the daily high.

From a technical perspective, last week's strong move up assisted the USD/CAD pair to confirm a bullish breakout through a downward sloping trend-line extending from December 2021. A subsequent move beyond the 1.2900 mark validated the constructive outlook and supports prospects for a further near-term appreciating move.

Hence, some follow-through strength, towards reclaiming the key 1.3000 psychological mark, remains a distinct possibility amid expectations for a more aggressive policy tightening by the Fed. The momentum could further get extended and pushed the USD/CAD pair towards the next relevant resistance near the 1.3045-1.3050 region.

On the flip side, the 1.2910-1.2900 area now seems to protect the immediate downside ahead of the ascending trend-line resistance breakpoint, currently around mid-1.2800s. Any further pullback might still be seen as a buying opportunity near the 1.2800 round-figure mark, which should now act as a strong base for the USD/CAD pair.

A convincing break below would negate the near-term bullish bias and prompt some technical selling. The USD/CAD pair might then turn vulnerable to accelerate the downfall back towards testing last week's swing low, around the 1.2715-1.2710 region.

USD/CAD daily chart

Key levels to watch

USD/CAD

Overview
Today last price	1.2926
Today Daily Change	0.0022
Today Daily Change %	0.17
Today daily open	1.2904

Trends
Daily SMA20	1.2716
Daily SMA50	1.2664
Daily SMA100	1.2682
Daily SMA200	1.2641

Levels
Previous Daily High	1.2914
Previous Daily Low	1.2814
Previous Weekly High	1.2914
Previous Weekly Low	1.2713
Previous Monthly High	1.288
Previous Monthly Low	1.2403
Daily Fibonacci 38.2%	1.2876
Daily Fibonacci 61.8%	1.2852
Daily Pivot Point S1	1.284
Daily Pivot Point S2	1.2777
Daily Pivot Point S3	1.274
Daily Pivot Point R1	1.2941
Daily Pivot Point R2	1.2978
Daily Pivot Point R3	1.3042

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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