USD/CAD Price Analysis: Slides to fresh weekly lows, below 1.2600 mark

A combination of factors underpinned the loonie and prompted fresh selling around USD/CAD.
The price action between two converging trend-line constitutes the formation of a falling wedge.
Neutral technical indicators warrant some caution before placing any aggressive directional bets.

Haresh Menghani FXStreet

The USD/CAD pair momentarily dropped below the 1.2600 mark and refreshed weekly lows during the first half of the European session.

Against the backdrop of Tuesday's upbeat Canadian Q4 GDP print, a modest uptick in crude oil prices continued underpinning the commodity-linked loonie. This, along with the emergence of some fresh selling around the US dollar, exerted some pressure on the USD/CAD pair.

From a technical perspective, the intraday slide found some support near a downward sloping trend-line. This, along with another descending trend-line, seemed to constitute the formation of a falling wedge pattern on intraday charts and favours bullish traders.

The constructive set-up, however, is not confirmed until the USD/CAD pair decisively breaks through the resistance marked by the top boundary of the wedge. The mentioned hurdle is pegged near the 1.2655-60 area and should act as a key pivotal point for traders.

Meanwhile, technical indicators on 4-hourly/daily charts – though have been recovering from the negative territory – are yet to confirm a bullish bias. This further makes it prudent to wait for a sustained move beyond the mentioned barrier before placing fresh bets.

On the flip side, some follow-through selling below the daily swing lows, around the 1.2595-90 region will negate prospects for any meaningful recovery. This would turn the USD/CAD pair vulnerable to accelerate the slide further towards the key 1.2500 psychological mark.

USD/CAD 1-hourly chart

Technical levels to watch

USD/CAD

Overview
Today last price	1.2608
Today Daily Change	-0.0013
Today Daily Change %	-0.10
Today daily open	1.2621

Trends
Daily SMA20	1.2678
Daily SMA50	1.2721
Daily SMA100	1.2871
Daily SMA200	1.3124

Levels
Previous Daily High	1.2698
Previous Daily Low	1.26
Previous Weekly High	1.273
Previous Weekly Low	1.2468
Previous Monthly High	1.287
Previous Monthly Low	1.2468
Daily Fibonacci 38.2%	1.2638
Daily Fibonacci 61.8%	1.2661
Daily Pivot Point S1	1.2582
Daily Pivot Point S2	1.2542
Daily Pivot Point S3	1.2484
Daily Pivot Point R1	1.268
Daily Pivot Point R2	1.2738
Daily Pivot Point R3	1.2777

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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