Near the 1.3360 level, or the weekly low reached on Wednesday, USD/CAD draws some buyers. A little decline in the price of crude oil weakens the Canadian dollar and provides some support for the pair.

The USD’s safe-haven reputation and the intraday recovery benefit from a reduced risk tone. The USD/CAD pair has recovered from the weekly low reached on Wednesday and reached a new daily high. Bulls are now aiming to continue the trend above the 1.3400 level.

Crude Oil prices give up a significant portion of their intraday gains and hit a one-week low, which is expected to weaken the commodity-linked Loonie. In addition, the current risk-off environment favours the relative safe-haven status of the US Dollar and helps the USD/CAD pair draw some buyers at the 1.3360 area.

Any further ascent may, from a technical standpoint, encounter strong opposition towards the top of a descending channel that has been in place for more than two months. The obstacle above is close to the 1.3455 regions, followed by the swing high from last week, which should now serve as a turning point at 1.3475.

Bullish traders will see a prolonged strength above that level as a new trigger and will pave the way for an extension of the current recovery move from the lowest level since November 16. The optimistic bias will be reinforced if there is any follow-through purchasing over the 50-day SMA, which will cause the USD/CAD pair to surpass the 1.3500 psychological level.

The momentum may increase as it approaches a theoretically key 100-day SMA support breakpoint that has now turned into resistance in the 1.3530 area. Bulls may attempt to retake the 1.3600 level if this area is broken.

On the other hand, the daily low, at 1.3360, currently serves as immediate support to hold above the 1.3300 level. If there is a strong break below, the USD/CAD pair will be sensitive to dropping below the YTD low, which is located around the 1.3265–1.3266 area, and testing the 1.3200 level on the way to the channel support, which is located around the 1.3160–1.3155 area.

Daily USD/CAD chart