USD/CAD Price Analysis: Spikes to 1.2170 area, back closer to one-month tops

A modest pickup in the USD demand pushed USD/CAD to fresh session tops in the last hour.
The emergence of some dip-buying near the 1.2130 area supports prospects for further gains.
A sustained break below the 1.2100 mark would negate the near-term constructive outlook.

Haresh Menghani FXStreet

The USD/CAD pair rallied over 40 pips from the early European session lows and climbed to fresh daily tops, around the 1.2170 region in the last hour.

Expectations of a slightly less dovish Fed largely offset a fresh leg down in the US Treasury bond yields and acted as a tailwind for the US dollar. This, in turn, was seen as a key factor behind the latest leg of a sudden pick up in the last hour or so. The uptick seemed rather unaffected by bullish crude oil prices, which tends to underpin the commodity-linked loonie.

From a technical perspective, the USD/CAD pair attracted some dip-buying near a previous strong horizontal resistance breakpoint, now turned support near the 1.2130 region. This should now act as a key pivotal point for short-term traders and help determine the next leg of a directional move. The pair was last seen hovering just below one-month tops touched last Friday.

Meanwhile, technical indicators on the daily chart have just started moving into the positive territory and support prospects for additional gains. Some follow-through strength beyond the 1.2180 region (monthly lows) will reaffirm the constructive outlook and push the USD/CAD pair towards the 1.2200 mark en-route the next relevant hurdle near the 1.2265-70 region.

On the flip side, the 1.2130 region might continue to protect the immediate downside. This is followed by support near the 1.2100 mark, which if broken decisively will negate any near-term positive bias. The USD/CAD pair might then turn vulnerable and accelerate the slide back towards the key 1.2000 psychological mark, or the lowest level since May 2015 touched earlier this month.

USD/CAD 4-hour chart

Technical levels to watch

USD/CAD

Overview
Today last price	1.217
Today Daily Change	0.0026
Today Daily Change %	0.21
Today daily open	1.2144

Trends
Daily SMA20	1.2089
Daily SMA50	1.2256
Daily SMA100	1.2447
Daily SMA200	1.273

Levels
Previous Daily High	1.2172
Previous Daily Low	1.2128
Previous Weekly High	1.2178
Previous Weekly Low	1.2057
Previous Monthly High	1.2352
Previous Monthly Low	1.2013
Daily Fibonacci 38.2%	1.2145
Daily Fibonacci 61.8%	1.2155
Daily Pivot Point S1	1.2125
Daily Pivot Point S2	1.2105
Daily Pivot Point S3	1.2081
Daily Pivot Point R1	1.2168
Daily Pivot Point R2	1.2191
Daily Pivot Point R3	1.2211

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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