- USD/CAD rebounds from ahead of key 1.2660 support.
- Death cross suggests risks remain to the downside.
- RSI on hourly chart sees an uptick but remains bearish.
USD/CAD is making minor recovery attempts around the 1.2675 region, as the bulls yearn to regain the 1.2700 level ahead of the key US jobs data and Powell’s speech.
Despite the bounce, the bears are likely to retain control amid a bearish technical setup seen on the hourly chart.
The spot has confirmed a death cross formation on the given timeframe. A death cross is a bearish crossover and it occurs when the 50-simple moving average (SMA) crosses the 200-SMA from above.
The Relative Strength Index (RSI) has bounced-off lows but remains well below the midline, at 35.55, suggesting that the downside remains more compelling.
The recovery in USD/CAD is likely to meet strong offers at 1.2696, where the bearish 21-SMA aligns.
Recapturing the latter is critical to unleashing further recovery gains, with eyes set on the 1.2717 level. At this point, the 50 and 200-SMAs coincide.
On the flip side, a breach of the four-day-old falling trendline support at 1.2660 could trigger a sharp sell-off, opening floors for a test of the January 6 low at 1.2630.
USD/CAD: Hourly chart
USD/CAD: Additional levels
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