- USD / CAD is moving further back from resistance from a downtrend line tested on Monday.
- The intraday decline now appears to have found decent support near the 200 hourly SMA.
- Mixed oscillators on hourly / daily charts warrant some caution for aggressive investors.
The USD / CAD pair has extended the rejection drop of the previous day from the 1.2800 level and has seen some selling on Tuesday. The mentioned level coincides with a downtrend line and should now act as a key point for short-term investors.
Meanwhile, the slide has lacked subsequent selling and the USD / CAD pair, for now, appears to have formed a base close to the 200 hourly SMA. Therefore, it will be prudent to wait for a convincing break below the mentioned support before positioning for a further decline.
A new boost in US Treasury yields has offered some support to the USD. This, coupled with a reluctance to open aggressive positions ahead of Wednesday’s BoC decision, has prevented investors from opening directional positions and could help limit the slide.
The technical indicators on the daily chart, although they have been recovering from negative territory, have yet to confirm a bullish bias. Furthermore, the oscillators on the 4-hour chart remain in neutral territory and warrant more caution for aggressive investors.
That being said, sustained weakness below the 1.2725 region (200 hourly SMA) could spark some aggressive technical selling and make the USD / CAD pair vulnerable to breaking below the 1.2700 level. The downside move could drag the pair towards the 1.2665 support area.
On the other hand, immediate resistance is near the 1.2760 region, above which the bulls are likely to make another attempt to conquer the 1.2800 level. Some subsequent buying should pave the way for an extension of the recent recovery move from multi-year lows.
USD / CAD 1 hour chart
USD / CAD technical levels
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