- USD/CAD loses bullish traction amid firmer WTI prices, USD pullback.
- USD/CAD’s upswing above 21-DMA falters at the 200-DMA.
- Daily RSI wavers at 50.00, impending bear cross threatens the upside.
USD/CAD is trading modestly flat around mid-1.2400s in Monday’s early trades, having finished Friday almost unchanged.
The upside in the major faltered in the second half of the previous week after WTI prices resumed their uptrend while the US dollar lost its footing after Fed’s patient stance.
Heading into a fresh week, investors digest the latest comments from the Bank of Canada (BOC) Governor Macklem on inflation, as the focus shifts towards Fed Chair Jerome Powell’s appearances and the US Consumer Price Index (CPI) data due later this week.
Looking at USD/CAD’s daily chart, the pair is looking for a fresh directional impetus after forming a Doji candlestick on Friday.
The renewed upswing triggered in the major on acceptance above the 21-Daily Moving Average (DMA) near 1.2395 ran into strong offers at the horizontal 200-DMA at 1.2477.
For the bulls to regain control, the pair needs to find a strong foothold above the latter. The next bullish target is then envisioned at the 1.2500 level.
USD/CAD: Daily chart
The Relative Strength Index (RSI) trades at the 50.00 level, pointing to a lack of clear directional bias for now.
Meanwhile, the 50-DMA is set to cut the 100-DMA from above, which if occurs will confirm a bear cross on the said timeframe, triggering a fresh downswing in the major.
Sellers will then look to retest the 21-DMA, the resistance-turned-support, below which the downside will open up towards 1.2300.