USD/CAD Price Analysis: Bounces off multi-month lows around 1.2350

• USD/CAD trades cautiously on Tuesday in the early Asian session.
• Bulls remain hopeful to catch a bid around 1.2400 for more gains.
• Momentum oscillator holds onto oversold zone, warns caution against aggressive bids.

USD/CAD remains muted on Tuesday in the early Asian trading hours. The pair trades in a very narrow price band of 1.2340 and 1.2400 for the past two sessions with no meaningful traction. At the time of writing, USD/CAD is trading at 1.2380, up 0.01% for the day.

USD/CAD daily chart

On the daily chart, after testing the high of 1.2896 on September 20, the USD/CAD pair came under selling pressure. The pair then took solace at 50-day Simple Moving Average (SMA) at 1.2616 and moved back to the high made on September 29, at 1.2774. Once again a break of the mentioned SMA resulted in a downside movement for the pair toward the multi-month support near 1.2330. 

If the price sustains the intraday high it could easily test the 1.2450 horizontal resistance level followed by the psychological 1.2500 mark. The Moving Average Convergence Divergence  (MACD) trades in the oversold zone. Any uptick in the MACD would trigger a fresh round of buying opportunities for the pair. USD/CAD bulls would look out for October 8 high at 1.2562.

Alternatively, a break of multi-month support will bring more pain to the pair with the first downside target at a low of July 6 at 1.2303 followed by the 1.2270 horizontal support level. Next, the market participant will test the low made on June 16 at 1.2157.

USD/CAD additional levels