USD/CAD Price Analysis: On the back foot towards 1.2700
- USD/CAD holds onto downside break of 21-DMA despite late Friday’s corrective pullback.
- MACD also teases sellers, impending bear cross adds to the downside bias.
- 61.8% Fibonacci retracement offers extra filter to the north, two-month-old support line is the key to watch during major declines.
USD/CAD remains pressured around 1.2735 during the initial Asian session on Monday, fading Friday’s corrective pullback from 1.2693.
In doing so, the Loonie pair justifies the previous day’s daily close below the 21-DMA, as well as bearish MACD signals.
However, 50% Fibonacci retracement (Fibo.) of December 2021 to January 2022 downside, around 1.2700, will challenge the short-term sellers ahead of the 50-DMA and the 100-DMA, respectively around 1.2690 and 1.2675.
It should be noted, though, that the aforementioned DMAs are inching closer towards posting a bear cross and may exert additional downside pressure on the USD/CAD prices towards an upward sloping support line from mid-January, near 1.2620 by the press time.
On the flip side, a daily closing beyond the 21-DMA level of 1.2745 isn’t a green card to the USD/CAD bulls as the 61.8% Fibo. level near 1.2770 will act as an extra filter to the north.
Following that, a run-up towards the monthly high of 1.2900 can’t be ruled out.
USD/CAD: Daily 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.
