Technical Analysis: USDCAD eyes Canadian employment data to extend latest bounce
Although a one-month-old support line triggered USDCAD bounce off two-week low, The pair isn’t sure of further upside ahead of the Canadian employment data for February. Considering the oversold RSI conditions and strong support line, USDCAD is likely to keep the latest corrective pullback directed towards a short-term horizontal area around 1.2600. However, any further upside needs to defy bearish SMA and 200-SMA level of 1.2690 to recall the bulls.
Alternatively, a downside break of the stated support line, at 1.2520 needs a strong fundamental catalyst, either via upbeat oil prices or US dollar weakness, or rosy employment data, to keep the USDCAD sellers hopeful. It should, however, be noted that February’s multi-month low of 1.2465 will be a tough nut to break for the USDCAD bears if at all they manage to conquer the immediate support. Hence, USDCAD seems to lack favors for the further downside, which in turn suggests extended bounce. Though, the Canadian jobs report will be the key to watch.