USD/CAD Price Analysis: Extends pullback from short-term key resistance to 1.3600
- USD/CAD holds lower ground during two-day retreat from monthly high.
- Bearish MACD signals add strength to pullback moves targeting previous resistance line.
- Loonie pair’s recovery needs validation from April’s peak.
USD/CAD remains mildly offered near 1.3600 as it defends the previous day’s U-turn from a one-month high during Monday’s sluggish Asian session, especially amid the holidays in the US.
That said, the Loonie pair’s latest weakness justifies its inability to cross a two-month-old descending resistance line, around 1.3650 by the press time. Adding strength to the downside bias are the bearish MACD signals.
With this, the USD/CAD sellers are all set to prod the previous resistance line stretched from early March, close to 1.3550. However, a convergence of the 50-SMA and a three-week-old support line, near 1.3535 at the latest, could challenge the Loonie pair’s further downside.
Even if the quote breaks the 1.3535 support confluence, the 200-SMA level of around 1.3500 can act as the last defense of the USD/CAD buyers before giving control to the Loonie pair bears.
On the contrary, the aforementioned two-month-old resistance line, close to 1.3650, restricts the immediate upside of the pair ahead of the previous monthly high of around 1.3665-70.
Following that, the late March swing high near 1.3700 may act as an additional check for the USD/CAD buyers before targeting the yearly high marked in March around 1.3860.
Overall, USD/CAD is likely to witness further downside but the room towards the south is limited.
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.
