USD/CAD Price Analysis: Climbs to fresh YTD top, descending trend-line breakout in play

USD/CAD has gained traction for the second straight day and climbed back closer to the YTD peak.
Sliding crude oil prices undermined the loonie and extended support amid modest USD strength.
Move beyond the 1.2900 mark favours bullish traders and supports prospects for further gains.

Haresh Menghani FXStreet

The USD/CAD pair built on Friday's strong intraday rally from the 1.2720-1.2715 region and climbed to its highest level since March 9 during the early North American session on Monday. The emergence of fresh selling around crude oil undermined the commodity-linked loonie. This, along with the underlying bullish sentiment surrounding the US dollar, acted as a tailwind for spot prices for the second successive day.

From a technical perspective, spot prices are now looking to extend the momentum further beyond a downward-sloping trend-line extending from the December 2021 swing high. A move beyond the previous YTD top, at around the 1.2900 mark, now seems to have confirmed a fresh bullish breakout and supports prospects for additional gains. The USD/CAD pair could now appreciate further and test the 2021 peak, around the 1.2665 region touched in December.

That said, RSI (14) on the daily chart has moved to the verge of breaking into overbought territory and warrants some caution ahead of this week's key event/data risks. The Fed is scheduled to announce its monetary policy decision on Wednesday. This will be followed by the closely watched monthly jobs report from the US (NFP) and Canada, which will play a key role in determining the near-term trajectory for the USD/CAD pair.

In the meantime, any meaningful pullback now seems to find some support near the 1.2860-1.2855 region ahead of the daily low, around the 1.2830 area. This is followed by the 1.2800 round-figure mark, which if broken decisively will negate the positive outlook and prompt aggressive technical selling around the USD/CAD pair. The downward trajectory could then accelerate towards the 1.2720-1.2715 area, en-route to the 1.2700 round-figure mark.

Some follow-through selling would pave the way for a fall towards testing the 1.2650-1.2640 region. The latter marks a horizontal resistance breakpoint and coincides with the very important 200-day SMA, which, in turn, should act as a strong base for the USD/CAD pair and a key pivotal point.

USD/CAD daily chart

Key levels to watch

USD/CAD

Overview
Today last price	1.289
Today Daily Change	0.0045
Today Daily Change %	0.35
Today daily open	1.2845

Trends
Daily SMA20	1.2639
Daily SMA50	1.2656
Daily SMA100	1.2682
Daily SMA200	1.2633

Levels
Previous Daily High	1.2862
Previous Daily Low	1.2719
Previous Weekly High	1.288
Previous Weekly Low	1.2684
Previous Monthly High	1.288
Previous Monthly Low	1.2403
Daily Fibonacci 38.2%	1.2807
Daily Fibonacci 61.8%	1.2774
Daily Pivot Point S1	1.2755
Daily Pivot Point S2	1.2665
Daily Pivot Point S3	1.2612
Daily Pivot Point R1	1.2898
Daily Pivot Point R2	1.2952
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.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.