USD/CAD Price Analysis: Struggles near two-week low/50 DMA ahead of Canadian CPI

USD/CAD languishes near a two-week low amid the prevalent USD selling bias.
Softer crude oil prices could undermine the loonie and help limit the downside.
Investors await the Canadian CPI report before placing fresh directional bets.

Haresh Menghani FXStreet

The USD/CAD pair edges lower for the fourth successive day on Wednesday and was last seen trading near a two-week low, just above mid-1.2800s during the first half of the European session.

The US dollar remains on the defensive amid receding bets for a massive 100 bps rate hike by the Federal Reserve on July 27. This, in turn, is seen as a key factor that continues acting as a headwind for the USD/CAD pair. That said, a modest downtick in crude oil prices is undermining the commodity-linked loonie and could help limit losses for the USD/CAD pair. Investors might also refrain from placing aggressive bets ahead of the Canadian CPI report.

From a technical perspective, the 1.2850 area represents confluence support - comprising of 50-day SMA and the 50% Fibonacci retracement level of the 1.2517-1.3223 strong rally. This should now act as a key pivotal point for intraday traders and help determine the next leg of a directional move for the USD/CAD pair. Some follow-through selling should pave the way for a fall towards the 1.2830-1.2820 support en-route the 1.2800 round-figure mark.

A convincing break below the latter would be seen as a fresh trigger for bearish traders and make the USD/CAD pair vulnerable to accelerating the fall towards the 1.2700 mark. The downward trajectory could further get extended towards the next relevant support near the 1.2675-1.2665 horizontal zone.

On the flip side, any meaningful recovery attempt might now confront stiff resistance near the 1.2900 mark ahead of the 1.2925-1.2930 region. This is followed by the 38.2% Fibo. level, around the 1.2960 area, which if cleared decisively would suggest that the correction has run its course and pave the way for additional gains.

The USD/CAD pair may then aim to surpass the 1.3000 psychological mark and retest the 1.3075-1.3085 supply zone, coinciding with the 23.6% Fibo. level. The positive momentum could eventually lift spot prices back above the 1.3100 round-figure mark.

USD/CAD daily chart

Key levels to watch

USD/CAD

Overview
Today last price	1.2858
Today Daily Change	-0.0012
Today Daily Change %	-0.09
Today daily open	1.287

Trends
Daily SMA20	1.2955
Daily SMA50	1.2861
Daily SMA100	1.2769
Daily SMA200	1.2704

Levels
Previous Daily High	1.299
Previous Daily Low	1.2868
Previous Weekly High	1.3224
Previous Weekly Low	1.2936
Previous Monthly High	1.3079
Previous Monthly Low	1.2518
Daily Fibonacci 38.2%	1.2914
Daily Fibonacci 61.8%	1.2943
Daily Pivot Point S1	1.2829
Daily Pivot Point S2	1.2787
Daily Pivot Point S3	1.2706
Daily Pivot Point R1	1.2951
Daily Pivot Point R2	1.3031
Daily Pivot Point R3	1.3073

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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