- USD / CAD gained some positive traction on Monday and recovered some of the post-NFP losses.
- The surge of buying on the dips favors bull traders and supports the prospects for additional earnings.
The pair USD / CAD It maintained its offered tone heading into the American session and was last seen hovering near the upper end of its daily trading range, above 1.2350.
That said, an unexpected spike in the US unemployment rate could have dashed hopes for an earlier-than-anticipated tightening of monetary policy by the Fed. This, in turn, acted as a headwind for the US dollar and limited gains for the USD / CAD pair. The bulls also seemed reluctant to make aggressive bets ahead of the crucial OPEC + meeting on Monday.
From a technical perspective, the appearance of some buying on the dips on the first day of a new trading week helped the USD / CAD pair stop its subsequent pullback to the NFP figures from a short-term downtrend line. The aforementioned trend line has been limiting the upside since early 2021 and should now act as a key point for short-term traders.
Meanwhile, the 100-day SMA, currently around the 1.2385 region, could act as immediate resistance. This is closely followed by 1.2400, above which the USD / CAD appears poised to rise again to challenge the trend line hurdle, around 1.2450. A convincing advance will be seen as a new trigger for bull traders.
On the other hand, the 1.2310-1.2300 area now appears to have emerged as immediate strong support. Sustained weakness below could spark some technical selling and drag USD / CAD towards last week’s swing lows support around 1.2205. Some subsequent selling could change the short-term bias in favor of bearish traders.
The next relevant support is pegged near 1.2200 ahead of the breakout point of strong horizontal resistance near the 1.2160-50 area. This should act as a solid foundation for the USD / CAD pair, which if it breaks decisively will negate the prospects for further gains.
Daily chart
-637610896382092051.png "Rises past 1.2350, at new session highs")
Technical levels
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