USD/CAD Price Analysis: Clings to recovery gains, remains below mid-1.2300s

USD/CAD staged a modest recovery from multi-month lows touched earlier this Thursday.
The risk-off impulse, elevated US bond yields provided a goodish lift to the safe-haven USD.
Retreating crude oil prices undermined the loonie and remained supportive of the momentum.

Haresh Menghani FXStreet

The USD/CAD pair showed some resilience below the 1.2300 round-figure mark and stage a goodish intraday bounce from four-month lows touched earlier this Thursday. The pair held on to its modest recovery gains through the mid-European session and was last seen hovering near daily tops, just below mid-1.2300s.

The risk-off impulse in the markets helped revive demand for the safe-haven US dollar, which further benefitted from elevated US Treasury bond yields. Apart from this, a modest pullback in crude oil prices from multi-year tops weighed on the commodity-linked loonie and triggered a short-covering around the USD/CAD pair.

From a technical perspective, oversold RSI (14) on the daily chart prompted bearish traders to take some profits off the table near the lower boundary of a short-term descending channel. The mentioned support, around the 1.2290-85 area, should act as a pivotal point for traders and help determine the near-term trajectory.

A convincing break below will mark a fresh bearish breakdown and turn the USD/CAD pair vulnerable to prolong its bearish trend witnessed over the past one month or so. The subsequent slide could get extended towards the next relevant support near mid-1.2300s before the pair eventually drops to the 1.2300 round-figure mark.

On the flip side, any further recovery is likely to confront resistance near the 1.2375-80 region ahead of the 1.2400 mark. Some follow-through buying should pave the way towards a confluence hurdle near the key 1.2500 psychological mark, comprising of the very important 200-day SMA and the top end of the mentioned channel.

USD/CAD daily chart

Technical levels to watch

USD/CAD

Overview
Today last price	1.2341
Today Daily Change	0.0021
Today Daily Change %	0.17
Today daily open	1.232

Trends
Daily SMA20	1.2534
Daily SMA50	1.2607
Daily SMA100	1.2509
Daily SMA200	1.2501

Levels
Previous Daily High	1.237
Previous Daily Low	1.2307
Previous Weekly High	1.2498
Previous Weekly Low	1.2337
Previous Monthly High	1.2896
Previous Monthly Low	1.2494
Daily Fibonacci 38.2%	1.2331
Daily Fibonacci 61.8%	1.2346
Daily Pivot Point S1	1.2295
Daily Pivot Point S2	1.227
Daily Pivot Point S3	1.2233
Daily Pivot Point R1	1.2357
Daily Pivot Point R2	1.2395
Daily Pivot Point R3	1.242

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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