The bullish momentum is evident for the USD/CAD pair, but the bulls have been unable to surpass the major resistance level at 1.2600. The setup still favors a bullish mover over the coming hours as the US Dollar keeps up its recent upward drive.
Greenback Maintains Momentum Against The Canadian Dollar
The US Dollars has performed excellently against the Loonie since the start of the week. The uncertainty regarding crude oil output has affected the Loonies performance, and it is set to suffer more in the coming hours.
The USD/CAD rallied at the start of the North American trading session to reach its highest level since April 21. The pair is currently trading above 1.2500, 0.50% up for the day. The sharp pullback in crude oil prices affected the CAD, and it continues to undermine its performance. This is the key factor that is pushing the USD/CAD pair higher for the fourth consecutive trading session.
Despite the CAD affected by the sharp decline in oil prices, the US Dollar couldnt take advantage of the situation to extend its rally. This is due to a steep decline in the US Treasury bond yields, prompting some profit-taking around the Greenback. The unexpected rise in the US Weekly Jobless Claims combined to undermine the USD and limit the gains for the USD/CAD pair.
The bias in the market is still in favor of bullish traders and supports prospects for further upward movement in the short term. The USD/CAD found acceptance above the 100-day SMA, solidifying its bullish position.
With the USD/CAD unable to capitalize on its recent momentum, traders would view any dip as a buying opportunity and will only be available for a limited time. The USD/CAD pair remains on track for a prolonged bullish movement and is expected to test the 200-day SMA resistance point, currently around the 1.2655 region.
The next major support is around the key 1.2500 psychological mark. The bulls might be able to comfortably defend this position but should be worried if there is a slide towards the mid-1.2400s.
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