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USD/CAD Bears Anticipate Further Losses In The Direction Of $1.34
After a three-day decline, USD/CAD remains under pressure near its weekly low. Bearish MACD signals and a U-turn from the 100-day exponential moving average favor Loonie pair sellers. Bulls remain off the table below 1.3670, and the south run appears to be lengthy and choppy.
In the early hours of Thursday, the USD/CAD continues to trade near the weekly low around 1.3440, following a three-day losing trend.
In doing so, the Loonie pair justifies yesterday's pullback from the 61.8% Fibonacci retracement of the February-March uptrend, as well as yesterday's retreat from the 100-bar Exponential Moving Average (EMA), amid adverse MACD signals.
Notably, the RSI (14) line approaches oversold territory, indicating that the USD/CAD exchange rate has limited downside potential.
Consequently, a horizontal area containing numerous lows marked since March 3 around 1.3400 becomes the most important support for pair traders to monitor. In addition, the 78.6% Fibonacci retracement level encircling 1.3390 provides immediate support.
In the event that the USD/CAD disregards RSI conditions and falls below 1.3390, a choppy decline towards February's low of 1.3262 cannot be ruled out.
In contrast, the 61.8% Fibonacci retracement level around 1.3490, also known as the golden Fibonacci ratio, restricts immediate recovery movements of the USD/CAD pair prior to the 100-EMA barrier of 1.3535.
If the USD/CAD price remains firmer than 1.3535, a convergence of the 200-EMA and 50% Fibonacci retracement around 1.3565 will present purchasers with a formidable obstacle.
The USD/CAD investors should remain cautious unless they observe a distinct break above the previous support line from early February, which was near 1.3670 at the time of publication.
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