USD/CAD struggles to defend the 1.2500 threshold after it became an exception to the G10 currency pairs that slumped versus the US dollar rally the previous day. That said, the quote seesaws near 1.2515 during the initial hours of Wednesday’s Asian session.

In doing so, the quote justifies strong prices of Canada’s main export item WTI crude oil as well as the rising bets on the Bank of Canada (BOC) rate lift ahead of the BOC Consumer Price Index (CPI) data. 

Given the escalating odds of the BOC’s rate hike, firmer prints of the Canadian inflation data will exert additional downside pressure on the USD/CAD prices. However, oil prices and Treasury yields are also important catalysts to watch for clear direction. 

As per the prior analysis, USD/CAD Price Analysis: The hourly 61.8% golden ratio is eyed for the opening sessions, the pair had been in the hands of the bears before the bulls took over for a probe of the recent highs.

The 4-hour chart was showing that the price was meeting the 4-hour resistance structure and was being rejected. This was expected to give rise to a deeper correction into the prior resistance that had a confluence of the 61.8% ratio at 1.25 the figure. 

The price is now at a crossroads. Should the bulls fail to keep control at this juncture, then the CAD would be expected to continue with its trajectory higher vs the US dollar given the resistance at the daily 38.2% Fibonacci. 

Although the 100-DMA and a monthly resistance line restrict the short-term upside of the USD/CAD prices respectively around 1.2620 and 1.2635, the bears need to conquer the 200-DMA and an upward sloping support line from June, close to 1.2500 and 1.2460 in that order to excel.

USDCAD Aiming at 1.2600

Jan 19 2022