USD/CAD Price Analysis: Bulls await a short-term descending channel breakout


  • USD/CAD moves into the positive territory for the third consecutive session on Thursday.
  • The set-up supports prospects for an eventual break through a descending trend channel.

The USD/CAD pair quickly reversed an early European session dip to sub-1.2600 levels and turned positive for the third consecutive session. The pair jumped back closer to over one-week tops set in the previous session, though lacked any follow-through buying.

A softer tone around crude oil prices undermined the commodity-linked loonie and extended some support to the USD/CAD pair. That said, the emergence of some fresh US dollar selling held bulls from placing aggressive bets and capped the upside, at least for the time being.

Looking at the technical picture, the USD/CAD pair, so far, has been struggling to find acceptance above the 1.2625-30 region. The mentioned area coincides with the top boundary of a four-month-old descending channel, which should now act as a key pivotal point.

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 gains.

A sustained move beyond might trigger a short-covering move and assist the USD/CAD pair to aim back to reclaim the 1.2700 mark for the first time since March 8. The momentum could further get extended towards the next relevant hurdle near the 1.2740-50 supply zone.

On the flip side, any meaningful pullback should continue to attract some dip-buying and remain limited near the 1.2600-1.2590 region. Some follow-through weakness below the 1.2575-70 region might turn the USD/CAD pair vulnerable to retest the key 1.2500 psychological mark.

USD/CAD daily chart

fxsoriginal

Technical levels to watch

USD/CAD

Overview
Today last price 1.2613
Today Daily Change 0.0004
Today Daily Change % 0.03
Today daily open 1.2609
 
Trends
Daily SMA20 1.254
Daily SMA50 1.2631
Daily SMA100 1.2719
Daily SMA200 1.2993
 
Levels
Previous Daily High 1.2635
Previous Daily Low 1.2563
Previous Weekly High 1.2647
Previous Weekly Low 1.2528
Previous Monthly High 1.274
Previous Monthly Low 1.2365
Daily Fibonacci 38.2% 1.2607
Daily Fibonacci 61.8% 1.259
Daily Pivot Point S1 1.257
Daily Pivot Point S2 1.253
Daily Pivot Point S3 1.2498
Daily Pivot Point R1 1.2641
Daily Pivot Point R2 1.2674
Daily Pivot Point R3 1.2713

 

 

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