- USD/CAD pares the biggest daily gain in a month as market consolidates Friday’s moves amid US Labor Day holiday.
- Bearish MACD signals, failure to cross key resistance line lure Loonie sellers.
- Intraday sellers eyed Golden Fibonacci Ratio ahead of the key DMAs.
- Bulls need validation from multiple technical, fundamental catalysts.
USD/CAD clings to mild losses around 1.3585 heading into Monday’s European session as market players consolidate Friday’s heavy gains amid a sluggish start to the week’s trading.
In doing so, the Loonie pair aptly portrays the USD/CAD pair trader’s cautious mood ahead of the Bank of Canada (BoC) Interest Rate Decision, as well as the Canadian employment data for August.
Technically, the bearish MACD signals join the USD/CAD pair’s U-turn from a downward-sloping resistance line from late April, around 1.3610 at the latest, keeping the Loonie pair sellers hopeful.
However, a daily closing beneath the 61.8% Fibonacci retracement of its March–July downside, near 1.3570, becomes necessary to convince intraday sellers of the USD/CAD. It’s worth noting that the stated Fibonacci retracement is also known as the Golden Fibonacci ratio.
Following that, the 21-DMA and 200-DMA, respectively near 1.3520 and 1.3465, will act as the final defense of the USD/CAD buyers.
Meanwhile, a daily closing beyond the aforementioned resistance line stretched from April, close to 1.3610 at the latest, could convince the USD/CAD bulls to prod the previous monthly high of around 1.3640.
In a case where the Loonie pair buyers keep the reins, the tops marked in May and April, close to 1.3655 and 1.3670, could act as additional upside filters before directing the prices toward the yearly top marked in March around 1.3860.
USD/CAD: Daily chart
Trend: Pullback expected
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