- USD/CAD clings to key Fibonacci retracement level within multi-day-old bearish channel.
- Steady RSI suggests further recovery from descending trend channel’s support but 21-DMA guards immediate upside.
- Seven-week-old falling trend line, 1.3350 appear key hurdles to cross for Loonie pair bulls.
- US Retail Sales, Canada inflation data will be crucial for further guidance.
USD/CAD portrays the typical pre-data inaction around 1.3200 heading into Tuesday’s European session. In doing so, the Loonie pair makes rounds to the 61.8% Fibonacci retracement of its August-October upside while holding lower grounds within a four-month-old bearish trend channel.
That said, the quote’s failure to cross the 21-DMA hurdle, around 1.3225 by the press time, joins the steady RSI (14) line to suggest further grinding of the USD/CAD prices toward the south.
However, the bottom line of the aforementioned descending channel, around 1.3100 by the press time, appears a tough nut to crack for the USD/CAD bears.
In a case where the USD/CAD price drops below 1.3100, the 1.3000 psychological magnet and the 78.6% Fibonacci retracement near 1.2990 could attract the sellers.
Meanwhile, an upside break of the 21-DMA resistance of near 1.3225 can propel the USD/CAD toward a downward-sloping resistance line from May 31, close to 1.3285.
Following that, a convergence of the 50-DMA and 50% Fibonacci retracement, around 1.3350, will be crucial to watch for the USD/CAD bulls to retake control.
Fundamentally, Canada’s headline Consumer Price Index (CPI), Bank of Canada CPI and the US Retail Sales for June will be important to watch for clear directions of the Loonie pair.
Also read: USD/CAD Outlook: Traders seem non-committed near 1.3200 ahead of Canadian CPI, US Retail Sales
USD/CAD: Daily chart
Trend: Limited upside expected
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