USD/CAD Price Analysis: Flirts with weekly support around mid 1.2800s
- USD/CAD licks its wound near daily low after Monday’s biggest fall in three weeks.
- RSI divergence, sustained trading below 200-SMA favor bears.
- Bulls need validation from seven-week-old horizontal area to retake control.
USD/CAD holds lower grounds near the intraday bottom, poking a one-week-old support line around 1.2850 during early Tuesday morning in Europe.
In doing so, the Loonie pair justifies the downbeat MACD signals and the bearish divergence portrayed by the RSI (14), the condition where the RSI doesn’t validate the higher high in prices.
With this, the quote is likely to break the immediate support line near 1.2850, which in turn could direct the USD/CAD bears towards the monthly low marked in the last week around 1.2765. However, the 1.2800 threshold may offer an intermediate halt during the fall.
In a case where the pair prices remain weak past 1.2765, the 61.8% Fibonacci Expansion (FE) of July 14 to August 05 moves, near 1.2700, will be in focus.
On the contrary, recovery moves may initially aim for the 200-SMA level surrounding 1.2915 ahead of eying the 1.3000 round figure. It’s worth noting that the recent peak of 1.2985 could also challenge the USD/CAD pair buyers.
It should be observed, however, that the quote’s run-up beyond the 1.3000 threshold needs to cross a horizontal area comprising multiple levels marked since mid-June, around 1.3080-90 to keep the reins.
USD/CAD: Four-hour chart
Trend: Further weakness expected