The USDCAD rally got a little ahead of itself over the last few sessions once markets broke above the 200MA.

The bounce back in equities (now almost all-time highs again!) and the crude oil market recovery (from $66 to $71.60) provided the support needed for a bounce in the CAD and a pullback in the USDCAD pair.

The USDCAD was swiftly sold from 1.2807 to 1.25’s but has managed to find support today. Channel support is just above the 1.2500 level, the 50% retracement of the June 23rd lows to this week’s highs are at 1.2532 and horizontal support (highs from June 21st) is near the 61.8% Fibonacci retracement at 1.2466.

Markets could expect a rally, following a close above the 200MA and near-term resistance at 1.2650.

What are your thoughts on this? Let us know the comments below.