- USD/CAD in bearish consolidation near monthly troughs.
- Risk-on mood and sell-off in WTI support the bounce.
- Path of least resistance remains to the downside.
USD/CAD is attempting a tepid bounce from monthly lows of 1.3110, helped by a broad-based US dollar rebound and the sell-off in WTI prices.
The greenback gains footing at the start of the week, courtesy of the relentless rise in USD/CNH after the Chinese central bank deployed new measures to stall the yuan appreciation.
Meanwhile, WTI remains offered into oversupply worries, as the Norwegian strike ends and the US oil producers also restore production after the hurricane Delta’s exit.
Despite the rebound, the spot remains exposed to the downside risks amid strengthening prospects of the Canadian economic recovery after Friday’s robust jobs report for September.
From a short-term technical perspective, the 21-hourly moving average (HMA) resistance has been clear, as the bulls fight back control. The hourly Relative Strength Index (RSI) points north while looking to recapture the bullish territory above 50.00.
Should the recovery sustain, the next upside target is seen 1.3144, the Asian session high. A break above the latter would open doors towards the bearish 50-HMA at 1.3172.
Alternatively, the monthly low could be back on the sellers’ mind below which the falling trendline support at 1.3091 could be tested.
USD/CAD: Hourly chart
USD/CAD: Additional levels