Home USD/CAD Price Analysis: Intraday positive move falters near 1.2600 support breakpoint
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USD/CAD Price Analysis: Intraday positive move falters near 1.2600 support breakpoint

  • USD/CAD recovered a part of the overnight losses, albeit lacked follow-through buying.
  • Neutral technical indicators warrant some caution before placing any directional bets.

The USD/CAD pair gained some positive traction on Thursday and recovered a part of the previous day’s losses to over one-week lows. Bulls, however, struggled to capitalize on the move beyond the 1.2600 mark, forcing the pair to trim a part of its intraday gains.

Retreating US Treasury bond yields kept the US dollar bulls on the defensive. Apart from this, a modest pickup in crude oil prices underpinned the commodity-linked loonie and further collaborated towards capping the upside for the USD/CAD pair, at least for now.

Looking at the technical picture, the USD/CAD pair on Wednesday found some support near the 38.2% Fibonacci level of the 1.2365-1.2647 recent recovery from multi-year lows. The attempted recovery faltered near a short-term ascending channel support breakpoint.

Meanwhile, natural technical indicators on hourly/daily charts haven’t been supportive of any firm direction. This makes it prudent to wait for a sustained break through the mentioned points before determining the next leg of a directional move for the USD/CAD pair.

Movement beyond the 1.2600 mark might confront some resistance near the 1.2625-30 region. This is closely followed by the weekly swing highs, around the 1.2645-50 region. Some follow-through buying might trigger a short-covering move and pave the way for additional gains.

The USD/CAD pair might then accelerate the momentum further towards reclaiming the 1.2700 round-figure mark. Bulls might eventually aim to test the next relevant barrier marked by March monthly tops, near the 1.2735-40 supply zone.

On the flip side, immediate support is pegged near the 1.2560 area ahead of the 38.2% Fibo. level, around the 1.2540 region. Failure to defend the mentioned support levels might prompt some technical selling and drag the USD/CAD pair back towards the key 1.2500 psychological mark.

USD/CAD 4-hour chart

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Techical levels to watch

 

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