USD/CAD Retreated from 1.2620

The USD/CAD pair started the new week trading around last sessions highs, but found resistance at 1.2620 before turning to the downside. The current market price is 1.2569 and it seems that bears are likely to test 1.2540 area (last weeks lows).

Technically speaking the short term outlook remains neutral to bearish. On the four hour time frame the price is developing below its moving averages. The 20-day SMA has turned flat while the 100-day and 200-day SMA are keeping downward slopes. Stochastic is showing strong bearish momentum and is nearing oversold area. RSI has lost directional strength and currently is located at 36.

First support is seen at 1.2540 and second at 1.2520, which is broken to below doors are opened for testing 1.2500. To the flip side first resistance is provided by 1.2620 and next at 1.2675.

A key event for the week is the Bank of Canada’s meeting on Wednesday, which is expected to keep the policy rate on hold at 1.25%. The greenback is unstable and weak due to the political woes and with the supportive oil USD/CAD seems to favor the downside.