- The USD / CAD gained some positive traction on Tuesday and moved away from the two-week lows.
- Bullish oil prices, renewed USD sell bias limited the rise near 23.6% from the Fibonacci level.
- It takes a sustained break below 1.2500 to confirm a further bearish breakout.
The pair USD / CAD it trimmed a portion of its intraday gains and was last seen trading just above the mid-1.2500, up 0.25% on the day.
A good recovery in crude oil prices sustained the Canadian dollar pegged to commodities and limited the rise in the USD / CAD pair. This, along with the emergence of new sales around the US dollar, drove some sales higher. Despite the negative factors, the pair has managed to stay well above the key psychological level of 1.2500, or two-week lows touched the day before.
From a technical perspective, the USD / CAD pair on Monday managed to find some support near the 50% Fibonacci level of the recent bounce of 1.2365-1.2647 from multi-year lows. However, the subsequent recovery faltered near the 23.6% Fibonacci level, around the 1.2575 region. This coincides with the 200 hourly SMA and should now act as a key point for the next leg of a directional move.
Meanwhile, the technical indicators on the 1-hour chart have been gaining positive traction and support the prospects for additional intraday gains. With that said, the oscillators on the daily chart, although they have rebounded from negative territory, have yet to confirm a bullish bias. This makes it prudent to wait for a move past the aforementioned confluence hurdle before placing new bullish bets.
A sustained force above has the potential to push the USD / CAD beyond 1.2600, to test the upper bound of a four-month descending channel, around the 1.2625-30 region. Some subsequent purchases will mark a short-term bullish breakout and set the stage for an extension of the recent bounce from multi-year lows, around the 1.2365 region touched on March 18.
On the other hand, immediate support is pegged near the 1.2540-35 region (38.2% of the Fibonacci level), below which the USD / CAD pair could fall to rest at the 50% of the Fibonacci level. Failure to defend such support levels will negate any positive short-term outlook and make the pair vulnerable to resume its previous / well-established downward trajectory seen over the last year or so.
1 hour chart
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
