USD/CAD bulls stand guard eases around 1.2516, up 0.04% in the day. The bear raid lasted two days and the price action is seeing 1.2490 - 1.2523 swings.

The market remains mixed with US Retail Sales data, and several Fed speeches lined up for the day. The indecision could be corrected if the Bank of Canada (BoC) Deputy Governor Lawrence Schembri speech provides enough traction. WTI crude oil cheered hopes of increasing demand and US President Joe Biden’s formal announcement of the $1.0 trillion infrastructure spending plan. Also favoring the oil bulls, and the USD/CAD bears in turn, was the US policymakers’ struggle to defend the Democratic pressure to tap the Strategic Petroleum Reserve (SPR) to cap elevated gasoline prices. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

As per Fibonacci Retracement (Fibo.) drawn from September 21, the loonie remains above 38.2% Fibo. The spot is sitting uncomfortably between the prior and 50.0% Fibo., if the pair is able to break above 1.2600, its weekly high; it will easily traverse the goodish 61.8% barrier. The USD/CAD pair's pullback from 50% Fibo. as seen in this chart, around 1.2570, directs the quote towards the 200-day Simple Moving Average (SMA) level, the first line of defence.

As per the daily chart, the loonie pair can test 1.2500 level, the confluence between 50 and 100-day SMA. The next upside resistance is a weekly high of 1.2605 and the last barrier would be 1.2739, the pair's monthly high.

The price can reverse and continue its previous downtrend and find support at 200-day SMA, 1.2471 and then 1.2423 (21-day SMA). Further ahead, one month low of 1.2288 can hold the descend.

The Moving Average Convergence Divergence (MACD) shows healthy but cautious movement upside. The Relative Strength Index (RSI) level is holding above the 50-line horizon, suggesting no downside momentum, but bulls stay vigilant.

Loonie Hovering Below Major Resistance Zone

Nov 16 2021