USD/CAD Reversal Extends To Fresh Lows

The US dollar pulls back to 1.2780 from 1.2870 highs. The Canadian dollar appreciated favored by a brighter market mood. USD/CAD is now testing trendline support at 1.2780.

The US dollar’s recovery from last Friday’s lows sub-1.2700 has found resistance at 1.2870 highs earlier Tuesday. The pair has dropped about 0.7% over the European and US sessions, to hit intra-day highs at 1.2780 so far. The pair also loses ground as risk sentiment improves

The USD has lost ground on Tuesday, with the Canadian dollar favored by the moderate market sentiment improvement. Investors’ hopes of seeing some progress in the peace talks between Russia and Ukraine have lifted the market mood, buoying the Canadian dollar in spite of the sharp decline in oil prices.

Marker sentiment, however, has been shattered during the US session after Russia’s President, Putin, affirmed that the Ukrainians are not being serious to find a mutually acceptable solution. These comments supported the US dollar, which seems to have firmed up to tick up to levels near 1.2800.

The hourly chart shows the pair attempting to bounce at short-term trendline support, from March 11 lows at 1.2695.

A confirmed breach of that level would increase bearish pressure on the US dollar, pushing the pair towards 1.2730 intra-day level before testing the support area at 1.2680/95 (March 4, 7, and 11 lows).

On the upside above 1.2800, the pair might find resistance at 1.2840 (March 10 high) and intra-day high at 1.2870.