• USD/CAD gained traction for the fourth successive day and climbed to over a two-week high.
  • Retreating oil prices undermined the loonie and remained supportive amid a stronger USD.
  • Sustained move beyond the 61.8% Fibo. level will set the stage for further near-term gains.

The USD/CAD pair built on last week's solid rebound from the 1.2520-1.2515 region, or its lowest level since April 21 and scaled higher for the fourth successive day on Monday. The momentum lifted spot prices to a two-and-half-week high, though stalled near the 1.2865-1.2870 resistance zone.

Oil prices retreated further from a three-month peak touched last week and undermined the commodity-linked loonie. On the other hand, the prospects for a more aggressive Fed rate hike moves to combat stubbornly high inflation, along with the risk-off mood, benefitted the safe-haven US dollar. The combination of factors continued acting as a tailwind for the USD/CAD pair and remained supportive of the strong move up.

Bulls, however, struggled to capitalize on the move or make it through the 1.2865-1.2870 supply zone, which coincides with the 61.8% Fibonacci retracement level of the 1.3077-1.2518 downfall. The mentioned barrier should now act as a pivotal point, which if cleared decisively would set the stage for a further near-term appreciating move. The USD/CAD pair might then accelerate the momentum towards reclaiming the 1.2900 round figure.

The upward trajectory could further get extended towards the 1.2920-1.2925 intermediate resistance en-route the 1.2960 region, above which bulls could aim to conquer the 1.3000 psychological mark. Some follow-through buying has the potential to push the USD/CAD pair towards the YTD peak, around the 1.3075 area touched in May.

On the flip side, the 50% Fibo. level, near the 1.2800 mark, seems to protect the immediate downside. Any subsequent slide could be seen as a buying opportunity near the 1.2760 region, which should limit the downside near the 1.2730 area, or the 38.2% Fibo. level. The latter should act as a strong base for the USD/CAD pair.

USD/CAD daily chart

fxsoriginal

Key levels to watch

USD/CAD

Overview
Today last price 1.2837
Today Daily Change 0.0063
Today Daily Change % 0.49
Today daily open 1.2774
 
Trends
Daily SMA20 1.2719
Daily SMA50 1.2727
Daily SMA100 1.2705
Daily SMA200 1.2663
 
Levels
Previous Daily High 1.2813
Previous Daily Low 1.2681
Previous Weekly High 1.2813
Previous Weekly Low 1.2518
Previous Monthly High 1.3077
Previous Monthly Low 1.2629
Daily Fibonacci 38.2% 1.2763
Daily Fibonacci 61.8% 1.2731
Daily Pivot Point S1 1.2699
Daily Pivot Point S2 1.2625
Daily Pivot Point S3 1.2568
Daily Pivot Point R1 1.2831
Daily Pivot Point R2 1.2887
Daily Pivot Point R3 1.2962

 

 

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