Jumps to near one-month high, seems poised to reclaim 1.3000 mark

• USD/CAD turned constructive for the fifth straight day and shot to a close to one-month excessive.
• The technical set-up favours bullish merchants and helps prospects for extra positive aspects.
• Any significant pullback beneath the 1.2865 zone could be seen as a shopping for alternative.

The USD/CAD pair attracted some dip-buying close to the 1.2865 space, the 61.8% Fibonacci retracement stage of the 1.3077-1.2518 fall and turned constructive for the fifth successive day on Tuesday. The momentum lifted spot costs to a close to one-month excessive, nearer to mid-1.2900s throughout the early North American session.

The US dollar reversed modest intraday losses and inched again nearer to an almost two-decade excessive touched the day past. This was seen as a key issue that acted as a tailwind for the USD/CAD pair. Bulls appeared fairly unaffected by a contemporary leg up in crude oil prices, which are inclined to underpin the commodity-linked loonie.

The emergence of contemporary shopping for close to the earlier resistance breakpoint now turned help, and a few follow-through energy past the 1.2900 mark favours bullish merchants. On condition that oscillators on the each day chart have been gaining constructive traction, the USD/CAD pair appears all set to extend a one-week-old appreciating transfer.

Spot costs may now intention to surpass an intermediate hurdle close to the 1.2980 area and reclaim the important thing 1.3000 psychological mark. The upward trajectory may additional get prolonged and permit the USD/CAD pair to problem the YTD peak, across the 1.3075 area touched on Might 12, although the pre-Fed nervousness may cap the upside.

On the flip facet, the 1.2870-65 area now turns into speedy sturdy help to defend. Any additional pullback is more likely to discover first rate help close to the 1.2820 horizontal zone. That is intently adopted by the 1.2800 round-figure mark, which coincides with the 50% Fibo. stage and will now act as a powerful base for the USD/CAD pair.

A convincing break beneath may make the pair weak to weaken additional beneath the 1.2760 help zone and drop to the 38.2% Fibo. stage, across the 1.2730 space. Some follow-through promoting, resulting in a subsequent break by means of the 1.2700 mark, would negate the near-term constructive bias and shift the bias in favour of bearish merchants.

USD/CAD each day chart

Key ranges to look at