USD/CAD Price Analysis: Bounces off 1.3330 key support ahead of Canada Employment data
- USD/CAD picks up bids to consolidate the second consecutive weekly loss.
- Seven-month-old ascending trend line, nearly oversold RSI conditions challenge Loonie pair sellers.
- Convergence of 100-DMA, 200-DMA appears a tough nut to crack for the bulls.
USD/CAD licks its wounds around 1.3360, pausing a three-day downtrend near the lowest levels in a year amid the early hours of Friday’s Asian session.
In doing so, the Loonie pair bounces off an upward-sloping support line from November 2022 ahead of the key Canada employment data. It should be noted that the early week’s surprise rate hike from the Bank of Canada (BoC) joins the latest hawkish comments from BoC’s Deputy Governor Paul Beaudry to keep the Loonie pair sellers hopeful.
Also read: Canada Employment Preview: Forecasts from five major banks, tight labour market
In addition to the pre-data anxiety and failure to break the key support line, the Loonie pair’s latest rebound could also be linked to the nearly oversold conditions of the RSI (14) line.
It’s worth noting, however, that the trend line breakdown on the momentum indicator and the USD/CAD pair’s sustained trading below the key moving averages keep the bears hopeful.
Hence, the pair stays on the seller’s radar unless crossing a convergence of the 100-DMA and 200-DMA, around 1.3515 by the press time. Though, the 1.3400 round figure and the weekly high of near 1.3460 can lure short-term buyers.
On the flip side, a daily closing beneath the aforementioned support line, close to 1.3330 at the latest, could make the USD/CAD pair vulnerable to poking the November 2022 bottom surrounding 1.3225.
USD/CAD: Daily chart
Trend: Limited recovery expected