Defend key 1.2660 support ahead of US and Powell data

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  • USD / CAD bounces above the key support at 1.2660.
  • A death crossover suggests that risks remain to the downside.
  • The RSI on the 1 hour chart sees a rally, but is still bearish.

USD / CAD is making small attempts to rally around the 1.2675 region, with the bulls yearning to regain the 1.2700 level ahead of key US employment data and Powell’s speech.

Despite the rebound, the bears are likely to remain in control amid a bearish technical setup seen on the 1 hour chart.

The pair has confirmed a death crossover pattern on the 1 hour time frame. A death cross is a bearish cross and occurs when the 50 hour SMA crosses the 200 hour SMA from above.

The RSI has bounced off lows but remains well below the midline, at the 35 level, suggesting that the decline remains more compelling.

The USD / CAD recovery is likely to find stiff resistance at 1.2696, where the bearish 21 hour moving average is located.

Regaining this last level is critical to unleashing additional recovery gains, aiming at the 1.2717 level. At this point, the 50 and 200 hour moving averages coincide.

On the other hand, a break of the four-day downtrend line support, now at 1.2660, could trigger a sharp decline, opening the doors for a test of the January 6 low at 1.2630.

USD / CAD 1 hour chart

USDCAD

USD / CAD technical levels

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