USD/CAD Price Analysis: Downside risk below 20-day SMA inside ascending channel
|- USD/CAD trades cautiously in the Asian trading hours on in the mid of the week.
- Bulls face multiple resistance near 1.2585, find it hard to break.
- Momentum oscillator holds onto overbought zone with a neutral stance.
USD/CAD accumulates minor losses in the initial Asian trading session. The pair hovers in a very narrow trade band with a negative bias.
At the time of writing, USD/CAD is trading at 1.2519, up 0.02% for the day.
USD/CAD daily chart
On the daily chart, the USD/CAD pair has been under corrective mode after testing the high of 1.2807 on July 19. USD/CAD made an effort to reverse the trend while meeting some strong support near the 1.2430 level.
The ascending channel marked the upside momentum until August 9 as price encounters stiff resistance with multiple top formations near 1.2585.
If price sustained below the intraday lows, it could break the lower trendline of the channel marking the onset of another round of downside momentum.
Being said, USD/CAD bears would first target the 1.2480 horizontal support level.
The Moving Average Convergence Divergence (MACD) indicator holds onto the positive territory but with receding momentum. Any downtick would amplify the selling pressure toward the low August 2 at 1.2453.
A break and daily close below the mentioned level would further encouraged the bears to testify the low in the vicinity of the 1.2420 area made on July 30.
Alternatively, if price moves higher, it recaptures the 20-day Simple Moving Average (SMA) at 1.2558.
A daily close below the mentioned level could mean more upside momentum in USD/CAD toward the 1.2600 psychological mark.
USD/CAD additional levels
The next area of resistance for the market participant would be the 1.2645 horizontal resistance level.
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