The USD/CAD pair staged a modest recovery on Thursday and bounced back to the 1.2600 handle during the early European session. But how has a sharp upsurge in crude oil prices impacted the pair? This is discussed in this 12 April USDCAD Technical Forecast.
12 April, GKFX – A strong upsurge in crude oil prices, led by escalating geopolitical tensions, underpinned the commodity-linked currency – Loonie, which along with persistent US Dollar selling and continued dragging the pair lower on Wednesday.
Hawkish FOMC minutes/easing geopolitical tensions revive USD demand
The pair slipped for the third consecutive session, marking the sixth day of decline in the previous seven, and fell to an intraday low level of 1.2545, the lowest level since Feb. 19, albeit found some following the release of hawkish FOMC meeting minutes.
Meanwhile, easing concerns over an immediate US military strike on Syria, coupled with a modest retracement in oil prices now seems to have prompted traders to lighten their bearish bets, especially after a sharp fall of over 200-pips since the beginning of this year.
Moving ahead, traders now look forward to the second-tier economic data – the usual US weekly initial jobless claims and Canadian New Housing Price Index (NHPI), to grab some short-term trading opportunities.
12 April USDCAD Technical Forecast
Any subsequent recovery is likely to confront resistance at the very important 200-day SMA, near the 1.2630 regions, above which a fresh bout of short-covering could lift the pair back towards the 1.2700 handle (100-day SMA).
On the flip side, weakness back below 1.2575-70 area might now turn the pair vulnerable to break below the 1.2550 intermediate support and extend its downfall further towards challenging the key 1.2500 psychological mark.
This article 12 April USDCAD Technical Forecast was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
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