- CAD looks for a risk catalyst, focus is on Michigan consumer sentiment.
- Bulls remain supported amid softer oil prices and Fed rate hike expectations.
- USD / CAD is heading towards the 1.2600 level, facing resistance ahead of 50% Fibonacci.
USD / CAD is trading near 1.2600 at the start of the European session on Friday. The pair has moved higher with the advance of the US dollar following the release of US inflation.
Expectations of a rate hike from the Fed could be the reason for the strength of the USD. Meanwhile, a pullback in WTI prices also supports USD / CAD.
On the US side, the limited market amid the Treasury market’s opening after a holiday will put investors on caution as they wait for the November release of US consumer sentiment from the University of Michigan to provide momentum. .
USD / CAD is trying to push higher but is meeting resistance just below the 1.2600 level. The pair has broken through the 50% Fibonacci retracement at 1.2580 on the daily chart, which is good news for the pair’s bulls.
The upward journey looks fast as the pair is targeting the 61.8% Fibonacci at 1.2636. If it breaks through this zone, the pair will test 1.2739, its monthly high for October. Higher up, you can test the September high at 1.2800.
On the other hand, support levels for the pair are seen at the 50 and 100 day simple moving averages, around 1.2540. However, if this region breaks down, the 200-day SMA at 1.2474 will be the next support. Lower down, the pair could target its monthly low at 1.2288.
The RSI has held firm towards the overbought zone, which suggests that the momentum to the upside remains intact. The MACD is bullish, which gives support and hope to the pair’s bulls.
USD / CAD daily chart
USD / CAD additional levels
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