- USD/CAD consolidates bounce below 1.2750 amid Kremlin comments.
- The recovery of the price of oil and the weakness of the US dollar limits the rise of the pair.
- Daily technical indicators point to upside risks in the pair.
USD/CAD has rebounded from daily lows of 1.2722, although remains capped around 1.2750, with the rebound fading amid persistent risk appetite in the market.
In the last hour, optimistic market sentiment has cooled somewhat after the Kremlin came out with a statement, saying there are still no concrete plans for a meeting between Putin and Biden.
The proposed diplomatic talks between the US and Russian leaders this week were the main reason behind the sudden rise in market sentiment earlier in the day.
However, with White House officials confirming the meeting, investors remain hopeful of de-escalation through Ukraine crisis diplomacy, keeping risk sentiment fairly stable, weighing on the safe-haven USD. Furthermore, the renewed rally in WTI prices also caps the rally in the USD/CAD pair.
Technically, USD/CAD needs to find acceptance above the psychological barrier of 1.2750 to extend the recovery momentum towards the February highs of 1.2789.
The 14-day RSI is pointing lower but remains above the mid-line, keeping buyers hopeful.
Also, adding credibility to the bullish view, the 21-day moving average is about to cut the horizontal 50 SMA to the upside, signaling a bullish crossover.
USD/CAD daily chart
On the other hand, strong support is seen at the confluence of the 21 and 50 SMAs at 1.2707, below which the recent range lows near 1.2670 will be tested.
Further down the horizontal 100 SMA at 1.2626 will come to the rescue of the bulls.
USD/CAD additional levels
Source: Fx Street
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