The USDCAD pair fades an early European session spike to a fresh weekly high and quickly retreats to the 1.3525-1.3530 region in the last hour. The downside, however, seems cushioned amid bearish crude oil prices, which tend to undermine the commodity-linked Loonie.

Even from a technical perspective, the post-NFP breakdown below the 50-day SMA support near the 1.3500 psychological mark favours bearish traders. This further warrants some caution for bullish traders and positioning for any meaningful appreciating move for the USDCAD pair. That said, an upside surprise from the US CPI will revive bets for a more aggressive policy tightening by the Fed and boost the US currency, negating the negative bias.

USDCAD struggles to defend buyers around 1.3540 heading into Thursday’s European session. In doing so, the Loonie pair approaches the one-week-old horizontal resistance area following its rebound from the 100-HMA.

Given the bullish MACD signals supporting the 100-HMA breakout, the USDCAD prices are likely to cross the immediate hurdle near 1.3550. However, the 200-HMA surrounding 1.3580 challenges the pair buyers.

It should be noted that the USDCAD pair’s successful trading above 1.3580 enables the buyers to aim for a monthly high of near 1.3810.

Meanwhile, the 100-HMA restricts the quote’s immediate downside to around 1.3510.

Following that, an upward-sloping trend line from Tuesday, around 1.3455, precedes the latest trough near 1.3385 to challenge the USDCAD bears.

Should the pair remains weak past 1.3385, highs marked during July 2022, around 1.3225, can’t be ruled out.

Overall, USDCAD remains on the bull’s radar but further upside appears limited unless the quote breaks the 200-HMA hurdle.

Loonie targeting D-EMA200 in the long term outlook

Nov 10 2022