- 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.
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
|Today last price||1.2608|
|Today Daily Change||-0.0013|
|Today Daily Change %||-0.10|
|Today daily open||1.2621|
|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|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.