USD/CAD Price Analysis: Recovers modest intraday losses, finds some support near 1.2700

• A combination of diverging forces failed to provide any meaningful impetus to USD/CAD.
• The technical setup seems tilted in favour of bulls and supports prospects for some upside.
• Bulls might still wait for a break through the 1.2785 barrier before placing aggressive bets.

The USD/CAD pair seesawed between tepid gains/minor losses through the early North American session and was influenced by a combination of diverging forces. A positive turnaround in the risk sentiment weighed on the safe-haven US dollar and acted as a headwind for the major.

That said, a sharp pullback in crude oil prices undermined the commodity-linked loonie and assisted the USD/CAD pair to attract some dip-buying near the 1.2700 mark. The pair, for now, seems to have stalled the overnight retracement slide from the 1.2780-1.2785 strong hurdle.

The latter marks the top boundary of a near three-week-old trading range and should act as a key pivotal point for short-term traders. Given that technical indicators on the daily chart are holding in the positive territory, the bias seems tilted in favour of bullish traders.

Hence, any subsequent slide below the 1.2700 mark could be seen as a buying opportunity. This, in turn, should help limit the downside near the 1.2660 horizontal support. This is followed by the monthly low, around the 1.2635 area, which if broken will negate the bullish bias.

The USD/CAD pair could then break below the 1.2600 mark and slide to the 1.2570-1.2560 support. Some follow-through selling would expose the very important 200-day SMA, around the 1.2520-1.2515 area, and the 1.2500 psychological mark before bears aim to challenge YTD low, around mid-1.2400s.

On the flip side, immediate resistance is pegged near the 1.2765 region ahead of the 1.2780-1.2785 strong barrier. A convincing breakthrough, leading to a subsequent move beyond the 1.2800 mark will reaffirm the bullish bias and lift the USD/CAD pair to the 1.2835 zone.

The momentum could further get extended towards reclaiming the 1.2900 round-figure mark, with some intermediate hurdle near the 1.2870-75 area.

USD/CAD daily chart

Key levels to watch