USD/CAD Registers Minor Recovery from 10-Month Low
After falling below 1.2600 mark for the first time since July 2015, on the back of a rally in oil futures, the USD/CAD pair has managed to register a minor recovery and is slowly heading back towards 1.2700 mark.
1.2700 key for further recovery
On short-term chart, (H1 and H4), even as the USD/CAD pair continues to hit fresh lows, the same is not confirmed by corresponding lower RSI reading. This occurrence, where prices continue to hit fresh lows and RSI reads higher low, is considered to be a bullish divergence. However, it should be noted that divergences might be misleading in a strong trend, which appears to be the case with the USD/CAD pair.
Nevertheless, the pair's recovery back above 1.2700 mark is likely to witness a follow through bids immediately towards 1.2730-40, which could further get extended till 1.2790-1.2800 handle.
On the downside, 1.2640 closely followed by 1.2625-20 seems to provide immediate support. Weakness below these levels and on subsequent drop below yesterday's low of 1.2593, the pair seems to continue with its weakening trend before finding support near 1.2540-30 area.