USD/CAD Technical Analysis: Off 4.5-month low, the pair is respecting oversold 1H RSI

• The USD/CAD dropped to 1.2813 in Asia – the lowest level since May 23 – as the Canadian dollar picked up a strong bid on NAFT deal.
• As of writing, the pair is down more than 200 pips from Friday’s high of 1.3048 and is looking oversold as per the relative strength index (RSI) on the hourly chart.
• Notably, the hourly RSI has also breached the descending trendline. As a result, a minor bounce could be in the offing, possibly to 1.2884 (resistance of Sept. 20 low on the hourly chart).

Hourly chart

Spot Rate: 1.2831

Daily High: 1.2888

Daily Low: 1.2812

Trend: Oversold

Resistance

R1: 1.2869 (200-day moving average)

R2: 1.2884 (Sept. 20 low)

R3: 1.2941 (10-day moving average)

Support

S1: 1.2818 (May 31 low)

S2: 1.2729 (May 11 low)

S3: 1.27 (psychological support)