USD/CAD Dips Below 1.2600 Mark to Hit Fresh 2016 Low
Tracking strength in WTI crude oil prices, the USD/CAD pair dropped to fresh 2016 low of 1.2574 before attempting a pull-back towards 1.2600 round figure mark.
Recovery in crude oil prices and a slew of positive economic data coupled with rising inflation in Canada has dragged the pair lower by over 14% from almost 13-year high touched in Jan. 2016. With the World Bank raising its forecast for crude oil prices, a dovish Fed seems to propel the pair further in the near-term.
Technical levels to watch
From current levels, the pair seems unlikely to register any meaningful recovery and continue drifting lower towards its next major support near 1.2550 level. With daily RSI very close to dropping into near-term oversold territory, the pair could witness some recovery from lower levels.
Meanwhile on the upside, 1.2600 round figure mark is likely to invite fresh offer which if absorbed might trigger a near-term short-covering rally immediately towards 1.2650-70 resistance zone. Should the short-covering momentum be strong to lift the pair beyond 1.2650-70 resistance, the pair could possibly make an attempt to reclaim 1.2700 mark and continue climbing higher towards 1.2735-40 strong resistance area.