USD/CAD Price Analysis: 100 DMA continues to offer stiff resistance
- USD/CAD remains sandwiched between key daily moving averages.
- Bulls extend previous gains amid a renewed uptick in the US dollar.
- WTI tumbles amid China concerns but a test of 200 DMA remains on the cards.
USD/CAD is consolidating gains just below the 1.2800 level, as bulls take a breather after the latest leg higher. The pair continues to find solace from tumbling WTI prices and a renewed uptick in the US dollar.
The common factor influencing the dollar as well as the WTI’s price action is the latest disappointing data from China, which has weighed negatively on risk sentiment. Traders keep their focus on Wednesday’s Canadian inflation data and the Fed minutes for a fresh directional move on the major.
From a short-term technical perspective, USD/CAD has edged higher to challenge the mildly bullish 100-Daily Moving Average (DMA) at 1.2801.
A sustained break above the latter will open doors for the additional upside towards the downward-sloping 21 DMA at 1.2852.
The 14-day Relative Strength Index (RSI) is trading flat beneath the midline, supporting the case for the downside.
A retest of the 200 DMA at 1.2747 remains inevitable should the pair witness renewed selling in the sessions ahead.
Daily closing below the 200 DMA support will initiate a fresh downtrend back towards the 1.2600 level.
USD/CAD: Daily chart
USD/CAD: Additional levels to consider