- USD/CAD staged a modest intraday recovery from 1.2600 mark.
- Sustained USD selling bias might hold bullish traders.
- Bullish crude oil prices should underpin the loonie and also collaborate to cap gains.
The Canadian dollar continues to slide lower against the US dollar as oil prices remain at elevated levels and the greenback losses ground commodity-related currencies. The USD/CAD pair built on its steady intraday bounce from near multi-week lows and inched back closer to mid-1.2600s during the early European session.
The pair managed to find decent support just ahead of the 1.2600 psychological round-figure mark and for now, seems to have stalled its recent downward trajectory witnessed over the past three weeks or so. The bounce lacked any obvious catalyst and could be categorized as a corrective move.
Additionally, the four-hour time frame shows that a trendline breakout has taken place, following the recent move under the 1.2685 level. While bearish MACD signals join upbeat fundamentals concerning the WTI and the US dollar weakness to favor USD/CAD bears, and a six-week-long horizontal area challenge the quote's further downside.
The USDCAD pair is only bearish while trading below the 1.2705 level, key support is found at the 1.2600 and any further breach should leave the pair open to further downside. The yearly low of 1.2589 holds the key to the pair's further south targeting the April 2018 low near 1.2525.
On the flip side, 1.2670 and the 1.2700 threshold can test the quote's corrective pullback. However, the monthly resistance around 1.2745 and 1.2755, will be tough nuts to crack for the USD/CAD bulls.
