USD/CAD Price Analysis: Climbs further beyond mid-1.2300s, fresh session tops

• USD/CAD gained some positive traction on Monday and recovered a part of the post-NFP losses.
• The emergence of dip-buying favours bullish traders and supports prospects for additional gains.

The USD/CAD pair maintained its bid tone heading into the North American session and was last seen hovering near the top end of its daily trading range, above mid-1.2300s.

That said, an unexpected rise in the US unemployment rate might have dashed hopes for an earlier than anticipated monetary policy tightening by the Fed. This, in turn, acted as a headwind for the US dollar and capped gains for the USD/CAD pair. Bulls also seemed reluctant to place any aggressive bets ahead of the crucial OPEC+ meeting on Monday.

From a technical perspective, the emergence of some dip-buying on the first day of a new trading week assisted the USD/CAD pair to stall its post-NFP pullback from a short-term descending trend-line. The mentioned trend-line has been capping the upside since the beginning of 2021 and should now act as a key pivotal point for short-term traders.

In the meantime, the 100-day SMA, currently around the 1.2385 region, might act as immediate resistance. This is closely followed by the 1.2400 mark, above which the USD/CAD pair seems all set to climb back to challenge the trendline hurdle, around mid-1.2400s. A convincing breakthrough will be seen as a fresh trigger for bullish traders.

On the flip side, the 1.2310-1.2300 area now seems to have emerged as immediate strong support. Sustained weakness below might prompt some technical selling and drag the USD/CAD pair back towards last week's swing lows support, around mid-1.2200s. Some follow-through selling could shift the near-term bias back in favour of bearish traders.

The next relevant support is pegged near the 1.2200 mark ahead of the ahead of strong horizontal resistance breakpoint near the 1.2160-50 area. This should act as a strong base for the USD/CAD pair, which if broken decisively will negate prospects for any further gains.

USD/CAD daily chart

Technical levels to watch