USD/CAD inches higher to 1.2310 levels in European trading
With the dollar holding firmer across the board, USD/CAD looks to be coming up for a bit of air but is still holding within its recent range in between 1.2266-68 and 1.2313-22.
That has seen price action play a bit of ping pong in recent days but the notable thing about the move higher today is that buyers are able to crack above the 100-hour moving average (red line) @ 1.2302, thus neutralising the more bearish near-term bias.
That said, they still do need to push back above the minor resistance at 1.2313-22 before taking a shot at the 200-hour moving average (blue line) @ 1.2378.
As much as the dollar is showing much poise today, I would still argue USD/CAD remains a sell on rallies – mostly the same for all loonie pairs in general i.e. buy the loonie dips.
With the Bank of Canada leading the tapering charge and looking to tighten policy, not to mention higher commodity prices, it is tough to fight the bigger trend.
That said, there is still scope for a deeper pullback with the 100-day moving average in USD/CAD seen at 1.2630 at the moment.
In any case, it is pretty much picking at risk levels when viewing CAD pairs as I would say that since the turn of the year, there is only but one play for the loonie and that is either to stay long or keep on the sidelines until more attractive entry levels come forward.
Going back to USD/CAD price action, a failure to breach the resistance region around 1.2313-22 will keep sellers in the game to potentially hunt the near-term support @ 1.2266-68 and a break below that will put the scope on the 2018 lows @ 1.2247-55 next.