USD/CAD Price Analysis: Upside remains capped below 21-DMA ahead US/Canadian data

USD/CAD holds gains above 1.2800 amid stabilizing US dollar.
The oil price rebound lends support to the CAD, capping the upside.
The pair turns lower below 21-DMA after rejection at higher levels.

Dhwani Mehta FXStreet

USD/CAD is off the daily highs near 1.2850 but remains better bid above 1.2800, as bulls find support from the pause in the US dollar sell-off ahead of the US GDP and Canadian Retail Sales data.

The dollar licks its wound following the not-that-hawkish Fed May meeting’s minutes, as it downplayed expectations of a more than 50 bps rate hike in the third quarter.

Meanwhile, the strength in the US oil prices caps the upside in the major, lending support to the resource-linked Canadian dollar.

Looking ahead, the US Q1 GDP revision, Pending Home Sales and the Canadian Retail Sales data will offer fresh trading impetus to USD/CAD traders.

From a short-term technical perspective, USD/CAD bulls have failed to find acceptance at higher levels after Monday’s slump to 1.2765 levels.

The 14-day Relative Strength Index (RSI) is trading listlessly just above the midline, suggesting that the spot lacks a clear directional bias.

Only a sustained move above the horizontal 21-Daily Moving Average (DMA) level at 1.2870 could help initiate a meaningful recovery towards 1.2900.

The 1.2950 psychological level will be the next relevant upside target.

USD/CAD: Daily chart

On the downside, bears need to crack the 1.2765 key demand area to resume the downtrend from May highs of 1.3076.

Further down, the confluence of the 50 and 100-DMAs around 1.2700 will act as strong support, below which the mildly bullish 200-DMA at 1.2663 will come into play.

USD/CAD: Additional levels to consider

USD/CAD

Overview
Today last price	1.2825
Today Daily Change	0.0009
Today Daily Change %	0.07
Today daily open	1.2816

Trends
Daily SMA20	1.2873
Daily SMA50	1.2701
Daily SMA100	1.2695
Daily SMA200	1.2663

Levels
Previous Daily High	1.2885
Previous Daily Low	1.2803
Previous Weekly High	1.2982
Previous Weekly Low	1.2776
Previous Monthly High	1.288
Previous Monthly Low	1.2403
Daily Fibonacci 38.2%	1.2834
Daily Fibonacci 61.8%	1.2854
Daily Pivot Point S1	1.2784
Daily Pivot Point S2	1.2752
Daily Pivot Point S3	1.2701
Daily Pivot Point R1	1.2866
Daily Pivot Point R2	1.2917
Daily Pivot Point R3	1.2949

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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