#USDCAD @ 1.31185 is underpinned by the USD rebound and WTI sell-off., Check trading levels

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• USD/CAD is underpinned by the USD rebound and WTI sell-off.
• Markets remain risk-averse ahead of key US ADP, Canadian GDP.
• Daily technical setup favors bulls, 1.3135 guards immediate upside.

The pair currently trades last at 1.31185.

The previous day high was 1.3108 while the previous day low was 1.2972. The daily 38.2% Fib levels comes at 1.3056, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3024, expected to provide support.

USD/CAD is posting moderate gains in the European session this Wednesday, helped by widespread risk-aversion on increased bets of super-sized rate hikes by the ECB and the Fed.

Aggressive tightening by major global central banks to tame inflation could risk tipping their economies into recession. These fears are dominating and weighing negatively on investors’ risk appetite.

Fresh covid lockdowns and the energy crisis in China are also adding to the risk-off market environment and triggering a 3.50% sell-off in WTI prices. The oil price weakness is fuelling further upside in the major at the cost of the resource-linked CAD.

Markets also prefer to hold the safe-haven US dollar in the lead-up to the critical ADP jobs data and the Canadian Q2 GDP release. The data set could play a pivotal role in altering the Fed and Bank of Canada’s (BOC) rate hike pricing.

From a short-term technical perspective, USD/CAD is primed to challenge the horizontal trendline resistance marked at 1.3135, which is the first hurdle on the move higher.

The next relevant barrier is seen at the July 14 high of 1.3223. Ahead of that, bulls will challenge the 1.3200 round number.

The 14-day Relative Strength Index (RSI) is edging higher, comfortable above the midline, backing the bullish potential.

Further, the 21-Daily Moving Average (DMA) and 50 DMA bullish crossover remains in play, adding credence to the upside.

On the flip side, the immediate support is aligned at the 1.3100 threshold, below which sellers will need to take out the daily low of 1.3063.

A sharp sell-off below the latter could kick in, opening floors for a test of the rising trendline support at 1.3000.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3111 at the time of writing. Pair opened at 1.3095 and is trading with a change of 0.12 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2918, 50 SMA 1.292, 100 SMA @ 1.2851 and 200 SMA @ 1.277.

The previous day high was 1.3108 while the previous day low was 1.2972. The daily 38.2% Fib levels comes at 1.3056, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3024, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3009, 1.2923, 1.2873
• Pivot resistance is noted at 1.3145, 1.3195, 1.3281

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