USD/CAD Price Analysis: Rallies to near 1.3750 amid recovery in US Dollar

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USD/CAD Price Analysis: Rallies to near 1.3750 amid recovery in US Dollar
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The USD/CAD pair recovered vertically to near 1.3750 as investors cleansed positions from risk-perceived assets and rushed back to the risk-aversion theme.

USD/CAD has extended recovery to near 1.3750 as the risk-on impulse faded. The USD Index recovered despite high chances for the Fed to keep interest rates unchanged until the end of 2023. USD/CAD recovered strongly after discovering buying interest near the 50% Fibo retracement at 1.3640. The Loonie asset delivered a sharp recovery as the US Dollar Index rebounded to near 105.60. S&P500 futures have reported some losses in the London session, portraying a dismal market mood.

The Relative Strength Index is testing waters in the bullish range of 60.00-80.00. If the RSI manages to sustain, a bullish momentum would get triggered. Going forward, a decisive break above October 27 high at 1.3880 would expose the round-level resistance at 1.3900, followed by 13 October 2022 high at 1.3978. In an alternate scenario, a breakdown below October 24 low around 1.3660 would drag the asset to the round-level support of 1.3600.

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