USD/CAD Price Analysis: Bulls need to make it through 100-day SMA hurdle near 1.3400 mark

USD/CAD consolidates in a range around the 50% Fibo. through the Asian session on Monday.
The fundamental backdrop favours bullish traders and supports prospects for additional gains.
A sustained break below the 1.3225 area is needed to negate the near-term positive outlook.

Haresh Menghani FXStreet

The USD/CAD pair kicks off the new week on a subdued note and oscillates in a narrow band around the 1.3370 area through the Asian session. Spot prices remain below a two-month peak touched on Friday and currently trade around the 50% Fibonacci retracement level of the May-July downfall.

Despite signs that demand for workers in the US was slowing, solid wage growth and a downtick in the unemployment rate pointed to continued tightness in the labour market. This should allow the Federal Reserve (Fed) will keep rates higher for longer and assists the USD to attract some dip-buying on Monday. The Canadian Dollar (CAD), on the other hand, is weighed down by the disappointing release of the domestic jobs report. Furthermore, Crude Oil prices ease from a fresh multi-month top and undermine the commodity-linked Loonie, which, in turn, acts as a tailwind for the USD/CAD pair.

The fundamental backdrop suggests that the path of least resistance for spot prices is to the upside, though bulls might still wait for sustained strength and acceptance beyond the 1.3400 mark, or the 100-day Simple Moving Average (SMA) before placing fresh bets. The USD/CAD pair might then climb to the 1.3445-1.3450 confluence hurdle, comprising the very important 200-day SMA and the 61.8% Fibo. level. The latter should act as a pivotal point, which if cleared will mark a fresh breakout and set the stage for an extension of the recent recovery from sub-1.3100 levels, or the YTD low touched in July.

On the flip side, the 1.3350 area now seems to protect the immediate downside ahead of the 38.2% Fibo. level, around the 1.3300 mark. The subsequent downfall is more likely to attract fresh buying near the 1.3250 horizontal support and remain limited near the 1.3225 region, or the 23.6% Fibo. level. That said, some follow-through selling will negate any near-term positive outlook and make the USD/CAD pair vulnerable to weakening below the 1.3200 mark. Spot prices might then accelerate the fall to the 1.3160-1.3150 intermediate support before eventually dropping to challenge the 1.3100 mark.

USD/CAD daily chart

Key levels to watch

USD/CAD

Overview
Today last price	1.3372
Today Daily Change	-0.0006
Today Daily Change %	-0.04
Today daily open	1.3378

Trends
Daily SMA20	1.3227
Daily SMA50	1.3279
Daily SMA100	1.3402
Daily SMA200	1.3456

Levels
Previous Daily High	1.3394
Previous Daily Low	1.332
Previous Weekly High	1.3394
Previous Weekly Low	1.3151
Previous Monthly High	1.3387
Previous Monthly Low	1.3093
Daily Fibonacci 38.2%	1.3366
Daily Fibonacci 61.8%	1.3348
Daily Pivot Point S1	1.3334
Daily Pivot Point S2	1.3289
Daily Pivot Point S3	1.3259
Daily Pivot Point R1	1.3408
Daily Pivot Point R2	1.3439
Daily Pivot Point R3	1.3483

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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