- USD/CAD gained traction for the second straight day and climbed again nearer to the YTD peak.
- Sliding crude oil costs undermined the loonie and prolonged help amid modest USD power.
- Transfer past the 1.2900 mark favours bullish merchants and helps prospects for additional good points.
The USD/CAD pair constructed on Friday’s sturdy intraday rally from the 1.2720-1.2715 area and climbed to its highest degree since March 9 throughout the early North American session on Monday. The emergence of contemporary promoting round crude oil undermined the commodity-linked loonie. This, together with the underlying bullish sentiment surrounding the US greenback, acted as a tailwind for spot costs for the second successive day.
From a technical perspective, spot costs at the moment are trying to prolong the momentum additional past a downward-sloping trend-line extending from December 2021 swing excessive. Transfer past the earlier YTD prime, across the 1.2900 mark, now appears to have confirmed a contemporary bullish breakout and helps prospects for added good points. The USD/CAD pair may now admire additional and take a look at the 2021 peak, across the 1.2665 area touched in December.
That stated, RSI (14) on the day by day chart have moved on the verge of breaking into overbought territory and warrants some warning forward of this week’s key occasion/information dangers. The Fed is scheduled to announce its financial coverage determination on Wednesday. This will likely be adopted by the carefully watched month-to-month jobs report from the US (NFP) and Canada, which can play a key function in figuring out the near-term trajectory for the USD/CAD pair.
Within the meantime, any significant pullback now appears to seek out some help close to the 1.2860-1.2855 area forward of the day by day low, across the 1.2830 space. That is adopted by the 1.2800 round-figure mark, which if damaged decisively will negate the constructive outlook and immediate aggressive technical promoting across the USD/CAD pair. The downward trajectory may then speed up in the direction of the 1.2720-1.2715 space en-route the 1.2700 round-figure mark.
Some follow-through promoting would pave the way in which for a fall in the direction of testing the 1.2650-1.2640 area. The latter marks a horizontal resistance breakpoint and coincides with the crucial 200-day SMA, which, in flip, ought to act as a robust base for the USD/CAD pair and a key pivotal level.
USD/CAD day by day chart
Key ranges to observe