USD/CAD: Rebound stalls above 1.3150 amid higher oil, bearish technicals

USD/CAD’s bounce appears to fizzle, as oil regains bid tone.
Bearish SMA crossover on the hourly chart to weigh on the pair.
Dollar licks wounds after the overnight slump, ahead of US data.

Dhwani Mehta FXStreet

The quick rebound in the USD/CAD pair from two-day lows of 1.3135 appears to have lost steam over the last hour, as the fresh uptick in oil prices lend support to the Canadian dollar.

Meanwhile, the US dollar holds steady so far this Friday, consolidating the overnight sell-off triggered by the unimpressive initial jobless claims, which stoked concerns over the strength of the US economic recovery.

The US oil, WTI, is back on the bids, underpinned by the OPEC and its allies’ (OPEC+) commitment towards the output cuts policy. The alliance said on Thursday following their meeting that they will take action on members that are not complying with deep output cuts to support the market.

The fresh uptick in oil offers support to the resource-linked Loonie, capping the recovery attempts in the major. Attention now turns towards the US UoM Consumer Sentiment data and sentiment on Wall Street for fresh trading impetus.

From a short-term technical perspective, the likely bearish crossover on the hourly chart seems to be weighing on the pullback. The 21-hourly Simple Moving Average is on the verge of piercing the 50-HMA from above.

Meanwhile, the hourly Relative Strength Index (RSI) points south while trending in the bearish territory below 50.0. The technical indicator allows for fresh weakness in the near-term.

Also, its worth noting that the major trades below all majors HMAs. Therefore, a test of the daily lows at 1.3135 cannot be ruled. On the flip side, a decisive break above the critical resistance at 1.3185, the confluence of 21 and 50-HMAs, is needed to negate the bearish momentum.

USD/CAD: Hourly chart

USD/CAD: Additional levels

USD/CAD

Overview
Today last price	1.3160
Today Daily Change	-0.0007
Today Daily Change %	-0.05
Today daily open	1.3168

Trends
Daily SMA20	1.3142
Daily SMA50	1.3286
Daily SMA100	1.3508
Daily SMA200	1.352

Levels
Previous Daily High	1.3247
Previous Daily Low	1.315
Previous Weekly High	1.326
Previous Weekly Low	1.3053
Previous Monthly High	1.3451
Previous Monthly Low	1.302
Daily Fibonacci 38.2%	1.3187
Daily Fibonacci 61.8%	1.321
Daily Pivot Point S1	1.313
Daily Pivot Point S2	1.3091
Daily Pivot Point S3	1.3033
Daily Pivot Point R1	1.3227
Daily Pivot Point R2	1.3285
Daily Pivot Point R3	1.3324

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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