- USD / CAD is likely to break out of its bearish consolidation to the downside.
- The relentless rise in WTI prices offsets the advance of the US dollar.
- The 1 hour chart shows the break of the support of the rising trend line.
USD / CAD is looking to challenge the April low of 1.2265 as risks remain to the downside amid a rally in WTI prices.
US oil is at two-month highs at $ 66.63 as sentiment has turned upbeat on expectations of a faster global economic recovery fueled by vaccines, likely to boost demand for fuel.
Meanwhile, the relentless rise in oil prices appears to negate the effect of a much firmer US dollar, which is putting persistent downward pressure on the pair.
USD / CAD technical perspective
The 1-hour chart of USD / CAD shows that the price is attempting a minor bounce after having broken the support of the two-day rising trend line at 1.2285.
The RSI has stabilized, but is at 38 points, which implies that there may be deeper losses on the table.
Therefore, the low of the month of April remains at risk, below which the psychological level of 1.2250 will enter the scene.
Keep in mind that the pair is moving below all major moving averages in this 1 hour time frame.
On the other hand, buyers should pull back above trend line support, now turned into resistance at 1.2286, to extend recovery momentum towards 1.2300.
USD / CAD 1 hour chart
USD / CAD additional levels
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