USD/CAD Price Analysis: Extends recovery to near 1.3250

USD/CAD rebounds to near 1.3250 after a consolidation breakout.
The USD Index has climbed to near 101.35 while the broader bias is still downbeat.
A mean-reversion move to near the 20-EMA is highly likely.

Sagar Dua FXStreet

The USD/CAD pair climbs to near 1.3250 after delivering a decisive break of the consolidation formed in a range of 1.3180-1.3230 from Wednesday. The Loonie asset jumps as the US Dollar Index (DXY) has recovered further and the oil price has been hit due to resumption of commercial shipment from the Red Sea route.

The oil price has been corrected almost 6% from three-week high of $76.00 as oil supply will improve ahead. It is worth noting that Canada is the leading exporter of oil to the United States and lower oil prices impact the Canadian Dollar.

Meanwhile, the recovery in the USD Index has been extended to 101.35. Investors hope that market reaction to expectations of rate cuts by the Federal Reserve (Fed) from March 2024 is overwhelming than anticipated. In spite of a swift recovery attempt, the USD Index is expected to end 2023 with significant losses.

USD/CAD has been falling since the first day of November and is expected to decline further towards June 27 low, which is around 1.3117. However, a mean-reversion move to near the downward-sloping 20-day Exponential Moving Average (EMA) around 1.3377 is highly likely.

The Relative Strength Index (RSI) (14) hovers in the bearish range of 20.00-40.00, which indicates downside momentum is intact.

Going forward, a breakdown below December 28 low of 1.3180 would expose the asset to July 25 low near 1.3150, followed by July 13 low around 1.3193.

In an alternate scenario, a recovery move above April 14 low around 1.3300 would drive the asset towards December 21 high at 1.3370. A breach of the latter would push the Loonie asset towards May 16 low at 1.3404.

USD/CAD daily chart

USD/CAD

Overview
Today last price	1.3248
Today Daily Change	0.0020
Today Daily Change %	0.15
Today daily open	1.3228

Trends
Daily SMA20	1.342
Daily SMA50	1.3606
Daily SMA100	1.359
Daily SMA200	1.349

Levels
Previous Daily High	1.3236
Previous Daily Low	1.3182
Previous Weekly High	1.3409
Previous Weekly Low	1.3219
Previous Monthly High	1.3899
Previous Monthly Low	1.3541
Daily Fibonacci 38.2%	1.3215
Daily Fibonacci 61.8%	1.3203
Daily Pivot Point S1	1.3195
Daily Pivot Point S2	1.3162
Daily Pivot Point S3	1.3142
Daily Pivot Point R1	1.3248
Daily Pivot Point R2	1.3269
Daily Pivot Point R3	1.3302

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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