USD/CAD set to test April lows at 1.2265 amid WTI rally, ahead of US data

USD/CAD is likely to break its bearish consolidation to the downside.
The relentless rise in WTI prices offset the US dollar’s advance.
The hourly chart shows a breach of the ascending trendline support.

Dhwani Mehta FXStreet

USD/CAD is looking to challenge the April low of 1.2265, as the risks remain to the downside amid a rally in WTI prices.

The US oil sits at two-month highs of $66.63, as the sentiment has turned bullish on expectations of a faster vaccine-driven global economic recovery, which is likely to boost the fuel demand.

Meanwhile, the relentless surge in oil prices appears to negate the effect of a broadly firmer US dollar, exerting persistent downward pressure on the spot.

Next of note for the major remains the US ADP and ISM Services PMI reports. In the meantime, the oil price dynamics will continue to play out.

USD/CAD: Technical Outlook

USD/CAD: Hourly chart

USD/CAD’s hourly chart shows that the price is attempting a minor bounce after having breached the two-day ascending trendline support at 1.2285.

The Relative Strength Index (RSI) has turned flat but trades at 38.58, implying that deeper losses remain on the cards.

Therefore, the April month low remains at risk, below which the psychological 1.2250 level will come into the picture.

Note that the spot is trading below all the major averages on the given time frame.

Alternatively, buyers need to scale back above the trendline support now resistance at 1.2286 to extend the recovery momentum towards 1.2300.

USD/CAD: Additional levels

USD/CAD

Overview
Today last price	1.2285
Today Daily Change	-0.0026
Today Daily Change %	-0.21
Today daily open	1.2311

Trends
Daily SMA20	1.2463
Daily SMA50	1.253
Daily SMA100	1.2634
Daily SMA200	1.2892

Levels
Previous Daily High	1.2352
Previous Daily Low	1.2276
Previous Weekly High	1.2491
Previous Weekly Low	1.2266
Previous Monthly High	1.2654
Previous Monthly Low	1.2266
Daily Fibonacci 38.2%	1.2323
Daily Fibonacci 61.8%	1.2305
Daily Pivot Point S1	1.2274
Daily Pivot Point S2	1.2237
Daily Pivot Point S3	1.2198
Daily Pivot Point R1	1.235
Daily Pivot Point R2	1.2388
Daily Pivot Point R3	1.2425

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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