- USD/CAD loses traction near 1.3407 despite the firmer US Dollar.
- The bearish outlook remains intact below the key EMA; RSI indicator is located in the bearish territory below the 50 midline.
- The first support level is seen at 1.3350; the immediate resistance level will emerge at 1.3440.
The USD/CAD pair trades on a softer note for the fourth consecutive day during the early European session on Tuesday. The higher oil prices amid the ongoing geopolitical tensions in the Middle East lift the commodity-linked Loonie and weigh on the USD/CAD pair. The pair currently trades around 1.3405, losing 0.04% on the day.
Technically, USD/CAD keeps the bearish bias unchanged as the pair is below the 50- and 100-period Exponential Moving Averages (EMA) on the four-hour chart. The path of the least resistance of USD/CAD is to the downside, as the Relative Strength Index (RSI) stands in bearish territory below the 50-midline.
A bearish breakout below the lower limit of the Bollinger Band at 1.3393 will see a drop to a low of January 11 at 1.3350. Any follow-through selling below the latter will expose the 1.3300 psychological support level, en route to a low of January 2 at 1.3228.
On the upside, the first upside barrier of the pair is located at the 100-period EMA at 1.3440. The additional upside filter to watch is the 50-period EMA at 1.3450. Further north, the next hurdle will emerge at the upper boundary of the Bollinger Band at 1.3516, followed by a high of January 25 at 1.3534.
USD/CAD four-hour chart
(This story was corrected on January 30 at 07:33 GMT to say, in the headline, first bullet point, and first paragraph, that the USD/CAD pair is trading around the 1.3400s, not 1.3700s.)
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