USD/CAD Reversing Early Gains, Dips Back Below 1.2950

USD/CAD Reversing Early Gains, Dips Back Below 1.2950

6 June 2016, 10:46
Roberto Jacobs
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USD/CAD Reversing Early Gains, Dips Back Below 1.2950

After falling to 50-day SMA last Friday, the USD/CAD pair attempted a bounce back to 1.2983 before retracing back to currently trade below the mid-point of 1.2900-1.3000 handle.

The pair on Friday nose-dived to 1.2915 on the back of awful NFP print and disappointment from the ISM non-manufacturing PMI. The pair, however, managed to hold 50-day SMA support and is rebounding from near-term oversold conditions on hourly chart. 

Moreover, broad US Dollar recovery, ahead of the Fed Chair Janet Yellen's speech later during NY session, also seems to assist the pair in holding its neck in green. 

Technical levels to watch

On the immediate downside, 50-day SMA near 1.2900 remains immediate support to defend, below which the pair is likely to drop immediately towards 1.2850-45 intermediate support before heading towards testing sub-1.2800 handle support near 1.2780-75 area. 

Meanwhile on the upside, 1.3000 psychological mark, also coinciding with 20-day SMA, now seems to act as immediate resistance. Momentum above this immediate psychological mark resistance is likely to get extended initially towards 1.3050 resistance before making a dart back towards 1.3100 handle.


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