USD/CAD Price Analysis: Recovers around 50-60 pips from over 1-week lows

• USD/CAD added to the overnight losses and dropped to over one-week lows on Thursday.
• Weaker oil prices undermined the loonie and helped limit deeper losses, at least for now.

The USD/CAD pair dropped to over one-week lows, closer to mid-1.4000s during the early North-American session, albeit quickly recovered few pips thereafter.

The overnight break below 200-hour SMA and a subsequent slide below the 38.2% Fibonacci level of the 1.3518-1.4668 upsurge acted as a key trigger for bearish traders.

However, the intraday downtick showed some resilience below 50.0% Fibo. level amid slightly oversold conditions on the 1-hourly chart and weaker crude oil prices.

Meanwhile, technical indicators on the daily chart – though have been correcting – have still managed to hold in the bullish territory and warrant some caution for bears.

Hence, it will be prudent to wait for some strong follow-through selling, possibly below daily swing lows, around the 1.4070-65 region, before positioning for a further slide.

Sustained break through the mentioned support will set the stage for an extension of the pair’s recent sharp retracement slide from multi-year tops set last Thursday.

On the flip side, any meaningful recovery attempt might confront some fresh supply the 1.4190-1.4200 region and seems more likely to remain capped ahead of 38.2% Fibo.

USD/CAD 1-hourly chart

Technical levels to watch