USD/CAD Price Analysis: Bulls looking to build on the recovery beyond 1.2800 mark

USD/CAD staged a modest recovery from a near two-month-old ascending channel support.
Bullish crude oil prices might underpin the loonie and cap any meaningful gains for the pair.
A convincing break below the 1.2770-65 area will set the stage for a further near-term slide.

Haresh Menghani FXStreet

The USD/CAD pair staged a goodish bounce from a one-and-half-week low touched earlier this Tuesday and climbed to the 1.2800 mark during the first half of the European session.

From a technical perspective, the recent corrective slide from the YTD low found a decent support near the lower boundary of an upward sloping channel extending from late October. The mentioned support is currently pegged near the 1.2770-65 region, which should now act as a pivotal point for short-term traders.

Meanwhile, technical indicators on the daily chart – though have been retreating from higher levels – are still holding in the positive territory. This, in turn, supports prospects for additional gains. That said, bullish crude oil prices might continue to underpin the commodity-linked loonie and cap the USD/CAD pair.

Hence, any subsequent positive move is more likely to confront stiff resistance near the 1.2845-50 supply zone. A sustained strength beyond will reinforce the constructive set-up and prompt some near-term short-covering rally. The USD/CAD pair could then aim back to reclaim the 1.2900 round-figure mark.

The momentum could get extended towards the recent daily closing high, near the 1.2935-40 area, en-route the YTD high, around the 1.2965 region. Some follow-through buying will be seen as a fresh trigger for bullish traders and has the potential to lift the USD/CAD pair towards the key 1.3000 psychological mark.

On the flip side, a convincing break below the trend-channel support, around the 1.2770-65 region, could prompt aggressive technical selling and accelerate the slide towards the 1.2710-1.2700 zone. The corrective fall could further get extended towards the 50/100-day SMAs confluence, currently around the 1.2625-15 region.

USD/CAD daily chart

Technical levels to watch

USD/CAD

Overview
Today last price	1.2799
Today Daily Change	0.0007
Today Daily Change %	0.05
Today daily open	1.2792

Trends
Daily SMA20	1.2802
Daily SMA50	1.2621
Daily SMA100	1.2618
Daily SMA200	1.2495

Levels
Previous Daily High	1.2848
Previous Daily Low	1.2779
Previous Weekly High	1.2964
Previous Weekly Low	1.2786
Previous Monthly High	1.2837
Previous Monthly Low	1.2352
Daily Fibonacci 38.2%	1.2805
Daily Fibonacci 61.8%	1.2822
Daily Pivot Point S1	1.2765
Daily Pivot Point S2	1.2738
Daily Pivot Point S3	1.2696
Daily Pivot Point R1	1.2833
Daily Pivot Point R2	1.2875
Daily Pivot Point R3	1.2902

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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