USD/CAD Price Analysis: Surrenders modest intraday recovery gains, bears eye 1.2500 mark

USD/CAD witnessed fresh selling on Wednesday and dropped to its lowest level since April 21.
Bullish oil prices underpinned the loonie and acted as a headwind amid a modest USD pullback.
Sustained weakness below the 1.2500 mark would pave the way for additional near-term losses.

Haresh Menghani FXStreet

The USD/CAD pair struggled to preserve its modest intraday recovery gains and met with a fresh supply near the 1.2560 area on Wednesday. The intraday downfall dragged spot prices to the lowest level since April 21, around the 1.2520 region during the early North American session.

Despite rising US Treasury bond yields and the prevalent cautious mood, the safe-haven US dollar failed to capitalize on its early move up amid a goodish pickup in demand for the shared currency. Apart from this, bullish crude oil prices underpinned the commodity-linked loonie and exerted some downward pressure on the USD/CAD pair.

From a technical perspective, last week's sustained break below the very important 200-day SMA was seen as a fresh trigger for bearish traders. Moreover, the USD/CAD pair's inability to gain any meaningful traction and the emergence of fresh selling at higher levels supports prospects for an extension of a near one-month-old bearish trend.

Some follow-through selling below the 1.2500 psychological mark will reaffirm the negative bias and drag the USD/CAD pair to the next relevant support near the 1.2450 region. The downward trajectory could further get extended and allow bearish traders to challenge the YTD low, around the 1.2400 mark touched on April 5.

On the flip side, the 1.2560 region, or the daily swing high, now seems to have emerged as an immediate hurdle. Any subsequent move up might now be seen as a selling opportunity near the 1.2600 mark. This, in turn, should cap the upside for the USD/CAD pair near the 200-DMA support breakpoint, currently around the 1.2660 area.

USD/CAD daily chart

Key levels to watch

USD/CAD

Overview
Today last price	1.2524
Today Daily Change	-0.0007
Today Daily Change %	-0.06
Today daily open	1.2531

Trends
Daily SMA20	1.2765
Daily SMA50	1.2717
Daily SMA100	1.27
Daily SMA200	1.2662

Levels
Previous Daily High	1.2619
Previous Daily Low	1.2524
Previous Weekly High	1.2714
Previous Weekly Low	1.2551
Previous Monthly High	1.3077
Previous Monthly Low	1.2629
Daily Fibonacci 38.2%	1.256
Daily Fibonacci 61.8%	1.2582
Daily Pivot Point S1	1.2497
Daily Pivot Point S2	1.2463
Daily Pivot Point S3	1.2403
Daily Pivot Point R1	1.2592
Daily Pivot Point R2	1.2653
Daily Pivot Point R3	1.2687

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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