- USD / CAD corrects for the third day in a row amid risk appetite sentiment.
- Upbeat sentiment weighs on the safe-haven US dollar and drives up WTI prices.
- The 21-day SMA may come to the rescue of the USD / CAD bulls.
The pair USD / CAD is extending its corrective slide for the third day in a row on Tuesday, as the US dollar licks its wounds after the recent sell-off amid a better appetite for risk in the markets.
The decreased fears of a reduction in bond purchases from the Fed earlier than expected, combined with a renewed optimism about covid vaccines, has increased risk appetite, weighing heavily on the safe-haven US dollar, while triggering a 5% surge in WTI prices the day before.
The USD continues to hold lower ground amid persistent risk appetite, especially after the Food and Drug Administration (FDA) grants full approval to the Pfizer / BioNTech COVID-19 vaccine.
Meanwhile, the strength in global stock markets and profit taking after seven days of losses, helped WTI make a strong turnaround, helping the CAD rebound as a currency pegged to commodity prices,
Recall that the USD / CAD touched the highest levels in eight months 1.2949 last Friday, but failed to stay at high levels, which triggered a strong correction that continues so far this Tuesday.
USD / CAD Technical perspective
The daily chart shows that USD / CAD is falling towards the 21-day moving average with an upward slope of 1.2577. Before that, the round 1.2600 level could test bears’ commitment.
The pair is currently trading at 1.2630, shedding 0.24% on the day.
Immediate resistance remains at 1.2660, the opening price and the daily high.
Higher up, the July 21 high at 1.2730 could challenge recovery attempts.
The 14-day RSI is pointing lower but remains well above the midline, keeping buyers hopeful.
USD / CAD daily chart
USD / CAD additional levels
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