Will USD/CAD Resume its Rally?

USD/CAD PRICE OUTLOOK: CANADIAN DOLLAR MIRED BY FED, OIL PRICES

• USD/CAD has pulled again 200-pips with the Canadian Greenback reversing current weak spot
• Canadian Greenback seems to be benefiting from greater oil costs and a broadly softer USD
• USD/CAD worth motion would possibly resume its advance as Federal Reserve taper threat nonetheless lingers

USD/CAD worth motion has pulled again over the past couple of buying and selling classes as volatility normalizes within the wake of the Fed’s hawkish pivot final week. Current crude oil worth features have doubtless helped the Canadian Greenback strengthen and regain misplaced floor in opposition to its USD peer too.

USD/CAD PRICE CHART: DAILY TIME FRAME (25 JAN TO 24 JUN 2021)

USD/CAD now trades about 200-pips beneath its month-to-date swing excessive across the 1.2475-price stage. Promoting stress appears to be subsiding now, nonetheless, as USD/CAD bulls look wrestle again management. This seems to align with a protection of technical assist across the 38.2% Fibonacci retracement stage of USD/CAD’s month-to-month buying and selling vary. That stated, the Canadian Greenback might weaken as soon as once more and ship USD/CAD worth motion towards the descending trendline highlighted on the chart above.

Invalidating this technical impediment has potential to carry April highs into focus. Reclaiming the short-term 8-day easy shifting common might warrant extra credence for this situation. However, closing out this week close to the lows would possibly improve the percentages of a deeper pullback towards the 1.2200-handle. This might correspond with a bearish MACD crossover.

— Written by Wealthy Dvorak, Analyst for DailyFX.com

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