USD/CAD bounces-off 1.2520 as rally in Oil stalls

• USD selling remains unabated.
• WTI corrects lower from mid-2015 highs.
• Finds support near 1.2515.

The USD/CAD pair stalled its downslide, tracking closely the oil price-action on the first trading day of 2018. However, the recovery attempts remain capped amid broad-based USD sell-off.

USD/CAD: Sellers still in control?

Fresh bids emerged once again near 1.2515 region, allowing a tepid bounce in USD/CAD back towards 1.2550 levels, as the resource-linked Loonie takes a breather from the latest upsurge amid a minor correction seen in oil prices.  WTI turned negative, easing slightly from fresh mid-2015 tops.

However, markets believe that any recovery in USD/CAD is likely to be short-lived on the back ongoing weakness in the USD against its bloc of major currencies. The greenback remains broadly sold-off into increased uncertainty over the 2018 Fed rate hike prospects and Fed Chair Designate Powell’s Presidency.

Markets now look forward to the sentiment on the Wall Street and US final manufacturing PMI report for fresh trading impetus in the session ahead.

USD/CAD Technical View

The immediate support for the pair aligns at 1.2513(2-month lows) ahead of 1.2474 (Oct 20 low) and 1.2450 (psychological levels). On the upside, resistances could be seen at 1.2578 (5-DMA), 1.2616 (100-DMA) and 1.2651 (10-DMA).