USD/CAD Price Analysis: Bears approach 1.2850 key support
- USD/CAD remains pressured towards three-week-old ascending support line.
- RSI retreat, failures to cross 200-SMA and monthly horizontal resistance all favor sellers.
- 61.8% Fibonacci retracement of June-July upside adds to the downside filters.
USD/CAD holds lower grounds around 1.2870 during the initial hour of Friday’s Asian session, after reversing from 1.2936 the previous day. In doing so, the Loonie pair portrays the initially to stay beyond the 200-SMA while also marking the U-turn from a horizontal resistance establishes since the month’s start.
Given the downbeat RSI and sluggish MACD adding strength to the bearish bias, the USD/CAD prices are likely to challenge an upward sloping support line from June 28, at 1.2850 by the press time.
Following that, the 61.8% Fibonacci retracement (Fibo.) of the June-July advances, near 1.2785, will be important to watch for the pair sellers.
Meanwhile, the 200-SMA and the aforementioned horizontal resistance, respectively near 1.2915 and 1.2940, guard short-term recovery moves of the USD/CAD pair.
Following that, an area comprising multiple levels marked since June 17, between 1.3080 and 1.3090, could challenge the pair buyers before directing them to the monthly peak of 1.3223.
Overall, USD/CAD is likely to witness further downside but needs validation from 1.2850.
USD/CAD: four-hour chart
Trend: Further weakness expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
