The pair is holding in tight range on Wednesday, with near-term risk turning lower as CAD got boosted by higher oil prices.
The USDCAD pair’s price is in descending mode from 06 Oct high at 1.2597, after the base of descending daily cloud capped recovery. The price remained capped by falling cloud in past few sessions and probes below initial support at 1.2507 (daily Tenkan-sen), firm break of which would generate another negative signal for extension of pullback from 1.2597.
However, corrective action could be shallow if Fed minutes today come in hawkish tone that would boost the greenback. US inflation data on Friday are also in near-term focus.
Bullish scenario requires firm penetration into daily cloud to signal further upside.
Lift above 1.2597 peak would expose 26 Aug top at 1.2662 and cloud top at 1.2697, in extension.
Res: 1.2527, 1.2558, 1.2597, 1.2662
Sup: 1.2507, 1.2484, 1.2448, 1.2416