Forex News

07:03:57 27-01-2023

USD/CAD Price Analysis: Off multi-month-old support line but upside remains capped below 1.3380

  • USD/CAD portrays corrective bounce from seven-month-old ascending support line.
  • Downbeat oscillators, 38.2% Fibonacci retracement and previous support line guards recovery moves.
  • 100-DMA holds the key to buyers conviction while break of 1.3300 could aim for 200-DMA.

USD/CAD picks up bids to pare recent losses around the lowest levels in 11 weeks, mildly bid near 1.3340 heading into Fridays European session. In doing so, the Loonie pair bounces off an upward-sloping support line from early June 2022.

However, a convergence of the previous support line from mid-November and the 38.2% Fibonacci retracement level of the pairs April-October upside, near 1.3380 by the press time, restricts USD/CAD pairs recovery.

Other than the aforementioned key resistance confluence near 1.3380, the bearish MACD signals and the downward-sloping RSI (14) also challenge the Loonie pairs corrective bounce.

Even if the USD/CAD buyers manage to cross the 1.3380 hurdle, the 100-DMA surrounding 1.3525 will be crucial to stop the upside momentum, a break of which wont hesitate to challenge the monthly high of near 1.3685.

On the flip side, a daily closing below the stated multi-month-old support line, close to 1.3300 at the latest, could quickly fetch the USD/CAD pair towards the 200-DMA support of around 1.3210.

In a case where the USD/CAD remains bearish past 1.3210, the 1.3200 round figure may act as the last defense of buyers before relinquishing control.

USD/CAD: Daily chart

Trend: Limited recovery expected

 

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