USD/CAD retreats from monthly top, flirts with short-term support line of late.
Overbought RSI, impending bear cross on MACD teases sellers.
Weekly ascending trend line, horizontal support from early May restricts immediate moves.
Buyers have a bumpy road to the yearly top marked in May.
USD/CAD fades upside momentum at the monthly high, retreating to 1.2950 during early Wednesday morning in Europe.
The Loonie pair’s pullback could be linked to the overbought RSI conditions, as well as a looming bear cross of the MACD. That said, the pullback remains elusive until the quote breaks the weekly support line, around 1.2950 by the press time.
Even so, a horizontal area comprising multiple levels marked since May 02, around 1.2920-15, will challenge the USD/CAD sellers.
Additionally, the 61.8% Fibonacci retracement (Fibo.) of May 12 to June 08 downside, near 1.2860, will precede the 1.2795 support confluence, including the 200-SMA and 50% Fibo, to limit the further downside of the pair.
Alternatively, recovery moves could initially be challenged by mid-May swing high, close to 1.2980, before highlighting the 1.3000 threshold as the key hurdle.
In a case where the USD/CAD prices rally beyond 1.3000, multiple resistances surrounding 1.3040-50, followed by May’s peak of 1.3076, might question the upside momentum.
Overall, USD/CAD is likely to witness a pullback but the downside appears limited.
USD/CAD: Four-hour chart
Trend: Pullback expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.