Technical Analysis

USD/CAD brought lower on oil rally as attempt above 1.34 fails again

The loonie is the best performer so far on Easter Monday

ForexLive

USD/CAD is facing a familiar kind of price action as we begin the week with the attempts to break firmly above the 1.3400 handle at the end of last week falling short. Now, we’re seeing price return towards a move below the 100-hour MA (red line) as the loonie strengthens on the back of a surge higher in oil prices.

As sellers hold below the level, it would mean the near-term bullish bias is now broken once again. Further support is now seen at the 200-hour MA (blue line) @ 1.3355. However, in the bigger picture, USD/CAD is basically still ranging very much between 1.3290-00 to 1.3400 over the past three weeks.

And that price action is also clearly detailed on the daily chart as well:

USD/CAD D1 22-04

Hence, a break below the key hourly moving averages may put sellers back in control in the near-term but there’s support from the 100-day MA (red line) @ 1.3338 to contend with before buyers lean on bids around 1.3290-00 for added support to hold up the pair.

Eventually, something’s gotta give and the trade would be to go with the break. But just be wary of a move towards the downside as there is further key support from the 200-day MA (blue line) @ 1.3209 as well as the upwards trendline support since February last year. That currently sits at 1.3229.

Those would be critical levels for sellers to break through in chasing a further move to the downside from this point on.

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