USD/CAD Price Analysis: Flirts with session lows, around 1.2675-70 region

  • USD/CAD edged lower on Monday and eroded a part of the previous session’s strong positive to two-week tops.
  • Bullish oil prices underpinned the loonie and exerted some pressure; renewed USD buying helped limit losses.
  • The set-up seems tilted in favour of bullish traders and supports prospects for the emergence of some dip-buying.

The USD/CAD pair witnessed some selling on the first day of a new trading week and eroded a part of Friday's strong positive move to two-week tops, around the 1.2745-50 supply zone. The pair was last seen trading near the lower end of its daily trading range, around the 1.2675-70 region.

A modest uptick in crude oil prices, now up around 1% for the day, underpinned the commodity-linked loonie and exerted some downward pressure. However, the emergence of some fresh US dollar buying interest extended some support and helped limit any deeper losses for the USD/CAD pair.

From a technical perspective, last week's strong rebound from multi-year tops struggled to find acceptance above the 61.8% Fibonacci level of the 1.2882-1.2468 downfall. The subsequent pullback has now dragged the USD/CAD pair back to a short-term descending trend-line resistance breakpoint.

The mentioned resistance-turned support coincides with the 50% Fibo. level and should now act as a pivotal point for short-term traders. Given that oscillators on the daily chart have recovered from the bearish territory, the pullback could still be seen as a buying opportunity.

That said, a convincing break below mid-1.2600s will negate the positive outlook and turn the USD/CAD pair vulnerable to resume its prior/well-established downtrend. The pair might then accelerate the fall towards 38.2% Fibo. level, around the 1.2625 region en-route the 1.2600 mark.

On the flip side, the 1.2700 round-figure mark now seems to act as immediate resistance. This is followed by the 61.8% Fibo. and the 1.2745-50 hurdle. A sustained strength beyond will be seen as a fresh trigger for bullish traders and pave the way for further near-term gains.

The USD/CAD pair might then aim to surpass the 1.2800 round-figure mark and head towards the next major resistance near the 1.2865-85 region tested in January.

USD/CAD 4-hourly chart


Technical levels to watch


Today last price 1.2672
Today Daily Change -0.0055
Today Daily Change % -0.43
Today daily open 1.2727
Daily SMA20 1.2697
Daily SMA50 1.2731
Daily SMA100 1.2881
Daily SMA200 1.3136
Previous Daily High 1.273
Previous Daily Low 1.2587
Previous Weekly High 1.273
Previous Weekly Low 1.2468
Previous Monthly High 1.287
Previous Monthly Low 1.2468
Daily Fibonacci 38.2% 1.2675
Daily Fibonacci 61.8% 1.2642
Daily Pivot Point S1 1.2633
Daily Pivot Point S2 1.2539
Daily Pivot Point S3 1.249
Daily Pivot Point R1 1.2776
Daily Pivot Point R2 1.2824
Daily Pivot Point R3 1.2918



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