USD/CAD Price Analysis: Bulls await a move beyond 1.2625-30 confluence hurdle

A combination of factors assisted USD/CAD to regain positive traction on Friday.
Bulls struggled to build on the move or find acceptance above the 1.2600 mark.
The technical set-up supports prospects for an eventual breakout to the upside.

Haresh Menghani FXStreet

The USD/CAD pair shot to an intraday high level of 1.2611 during the early European session, albeit quickly retreated few pips thereafter. The pair was last seen trading around the 1.2600 mark, up around 0.30% for the day.

The US dollar staged a solid rebound from over two-week lows amid a strong pickup in the US Treasury bond yields. Apart from this, a softer tone surrounding crude oil prices undermined the commodity-linked loonie and provided an additional boost to the USD/CAD pair.

That said, the underlying bullish sentiment in the financial markets capped gains for the safe-haven USD and held bulls from placing aggressive bets. Investors also seemed reluctant, rather preferred to wait for Friday's release of Canadian monthly employment details.

Looking at the technical picture, the USD/CAD pair, so far, has been struggling to find acceptance above the 1.2600 mark. This is followed by a confluence hurdle comprising of the top boundary of a four-month-old descending channel and 50-day SMA, around the 1.2625-30 region.

This should act as a key pivotal point, which if cleared decisively will mark a fresh bullish breakout and trigger a short-covering move. The momentum could then push the USD/CAD pair beyond the 1.2700 mark, towards the next relevant hurdle near the 1.2740-50 zone.

Meanwhile, technical indicators on hourly charts have been gaining positive traction and just started moving into the bullish territory on the daily chart. The set-up supports prospects for an eventual bullish breakout through the trend-channel and additional near-term gains.

On the flip side, any meaningful pullback should continue to attract some dip-buying and remain limited near the overnight swing lows, around the 1.2560-55 region. Some follow-through weakness below might turn the USD/CAD pair vulnerable to retest the 1.2500 psychological mark.

USD/CAD daily chart

Technical levels to watch

USD/CAD

Overview
Today last price	1.2602
Today Daily Change	0.0039
Today Daily Change %	0.31
Today daily open	1.2563

Trends
Daily SMA20	1.2542
Daily SMA50	1.2626
Daily SMA100	1.2714
Daily SMA200	1.2988

Levels
Previous Daily High	1.2627
Previous Daily Low	1.2558
Previous Weekly High	1.2647
Previous Weekly Low	1.2528
Previous Monthly High	1.274
Previous Monthly Low	1.2365
Daily Fibonacci 38.2%	1.2585
Daily Fibonacci 61.8%	1.2601
Daily Pivot Point S1	1.2539
Daily Pivot Point S2	1.2514
Daily Pivot Point S3	1.2469
Daily Pivot Point R1	1.2608
Daily Pivot Point R2	1.2652
Daily Pivot Point R3	1.2677

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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