USD/CAD Price Analysis: Further downside hinges on 1.3630 break
- USD/CAD seesaws around intraday low after falling the most in two weeks the previous day.
- One-month-old ascending support line restricts immediate downside; 200-EMA is the key hurdle for Loonie pair bears.
- Downbeat oscillators add strength to the bearish bias.
- Recovery needs validation from 1.3815 to convince the bulls.
USD/CAD bears take a breather around 1.3660 during the early Asian session, following the biggest daily loss in a fortnight. In doing so, the Loonie pair seesaws around the key short-term support, as well as floats above the 1.3630 support confluence.
USD/CAD pair’s weakness gains support from the bearish MACD signals and downbeat RSI (14) line, not oversold. However, upward-sloping support from late February, around 1.3650 at the latest, restricts immediate declines of the quote.
Following that, a convergence of the 200-bar Exponential Moving Average (EMA) joins the 38.2% Fibonacci retracement level of the pair’s February-March upside, near 1.3630, appears a tough nut to crack for the USD/CAD bears to crack.
Should the quote remains bearish past 1.3630, the odds of witnessing a slump toward the 50% Fibonacci retracement surrounding 1.3560 can’t be ruled out.
Meanwhile, recovery moves may initially aim to regain the 1.3700 round figure before challenging the latest tops surrounding 1.3750 and 1.3800.
However, a three-week-long horizontal resistance around 1.3815-20 holds the key to the USD/CAD bull’s conviction.
Overall, USD/CAD is likely to decline further but the downside needs validation from 1.3630.
USD/CAD: Four-hour chart
Trend: Limited downside 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.
