USD/CAD Price Analysis: Surges past 1.2600 mark, hits one-week tops

USD/CAD gained strong positive traction for the second consecutive session on Wednesday.
Technical indicators support prospects for an eventual break through a descending channel.
Sustained weakness back below the 1.2570 area is needed to negate the positive outlook.

Haresh Menghani FXStreet

The USD/CAD pair built on the previous day's strong move up and gained some follow-through traction for the second consecutive session on Wednesday. The momentum pushed the pair further beyond the 1.2600 round-figure mark, to one-week tops during the early European session.

The US dollar staged a modest bounce from two-week lows, which, in turn, was seen as one of the key factor driving the USD/CAD pair higher. Bulls seemed rather unaffected by a positive tone around crude oil prices, which tend to underpin demand for the commodity-linked loonie.

From a technical perspective, the USD/CAD pair has now moved closer to a resistance marked by the top boundary of a four-month-old descending channel. The mentioned barrier is pegged near the 1.2625-30 area, which if cleared decisively will mark a near-term bullish breakout.

Meanwhile, oscillators on the daily chart have just started moving into the positive territory and support prospects for an eventual breakout. This, in turn, will set the stage for an extension of the recent bounce from multi-year lows, around the 1.2365 region touched in March.

Bulls might then aim to surpass an intermediate hurdle near the 1.2665-70 region and push the USD/CAD pair further towards the 1.2700 mark. The upward trajectory could further get extended towards the next relevant resistance near the 1.2740-50 supply zone.

On the flip side, any meaningful pullback below the 1.2600 mark might attract some dip-buying and remain limited near the 1.2575-70 area. Sustained weakness below will negate the positive bias and turn the USD/CAD pair vulnerable to retest the key 1.2500 psychological mark.

USD/CAD daily chart

Technical levels to watch

USD/CAD

Overview
Today last price	1.2609
Today Daily Change	0.0043
Today Daily Change %	0.34
Today daily open	1.2566

Trends
Daily SMA20	1.254
Daily SMA50	1.2635
Daily SMA100	1.2724
Daily SMA200	1.2997

Levels
Previous Daily High	1.2583
Previous Daily Low	1.2517
Previous Weekly High	1.2647
Previous Weekly Low	1.2528
Previous Monthly High	1.274
Previous Monthly Low	1.2365
Daily Fibonacci 38.2%	1.2558
Daily Fibonacci 61.8%	1.2542
Daily Pivot Point S1	1.2528
Daily Pivot Point S2	1.2489
Daily Pivot Point S3	1.2461
Daily Pivot Point R1	1.2594
Daily Pivot Point R2	1.2622
Daily Pivot Point R3	1.266

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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