Search ForexCrunch
  • USD/CAD price managed to break the 1.2400 level and look positive for further gains.
  • Crude oil prices fell overnight that providing room to the USD/CAD bulls.
  • Market participants are awaiting the BoC decision for further fresh impetus.

At the start of the European session, the USD/CAD price broke through the 1.2400 level and rallied to nearly two-week highs in the final hour. Last traded at 1.2420-25, the pair gained 0.26%.

-If you are interested in high leveraged brokers, check our detailed guide-

After briefly consolidating in the first half of Wednesday’s trading, the USD/CAD pair built its most recent rally from below 1.2300 levels or a four-month low. Several factors triggered a third consecutive day of positive exercise – and the fourth in the previous five days.

Prices of crude oil fell overnight but are still near multi-year highs. In turn, this undercuts the commodity-pegged Canadian dollar and provides a tailwind for the USD/CAD pair. Additionally, the final round of the surge could be linked to some buying around the dollar in the last hour or so.

With expectations of Fed tightening soon, the bullish macro data from the US on Tuesday provided some support for the dollar. Nevertheless, the prevailing risk sentiment, coupled with further declines in US Treasury yields, might limit the USD/CAD rally.

In addition, investors may opt to avoid aggressive rates and wait for a new catalyst from the Bank of Canada’s meeting on Wednesday. At the start of the North American session, the Central Bank of Canada will announce its decision, causing some volatility in the USD/CAD pair.

Meanwhile, US economic statistics highlight the publication of durable goods orders. Furthermore, the yields on US bonds and general market risk sentiment could damage dollar demand. Finally, traders will consider oil price dynamics moving forward to capitalize on some opportunities around the USD/CAD pair.

-If you are interested in MT5 brokers, check our detailed guide-

USD/CAD price technical analysis: Bulls dominate above 1.2400

USD/CAD 4-hour price chart

The USD/CAD price remains well bid above the key 20-period and 50-period SMAs on the 4-hour chart. The price managed to break above the 1.2400 level, while the immediate hurdle is 100-period SMA around 1.2435. The same level coincides with the horizontal level as well. Further upside may test the 1.2500 mark (swing high of Oct 12). On the downside, 1.2400 is the key level. If broken, the price may test the previous resistance turned support at 1.2370 ahead of 1.2300.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.