USD/CAD Price Analysis: Bears eye further downside towards 1.3400
- USD/CAD stays pressured around one-week low after three-day downtrend.
- Bearish MACD signals, U-turn from 100-EMA favor Loonie pair sellers.
- Bulls remain off the table below 1.3670; south run appears long and bumpy.
USD/CAD holds lower ground near the weekly low surrounding 1.3440 amid early Thursday, following a three-day losing streak.
In doing so, the Loonie pair justifies the previous day’s pullback from the 61.8% Fibonacci retracement of the February-March upside, as well as the previous retreat from the 100-bar Exponential Moving Average (EMA), amid bearish MACD signals.
It’s worth noting, however, that the RSI (14) line approaches the oversold territory and hence suggests limited downside room for the USD/CAD price.
As a result, a horizontal area comprising multiple lows marked since March 03, around 1.3400 becomes the key support to watch for the pair traders. Also acting as immediate support is the 78.6% Fibonacci retracement level surrounding 1.3390.
In a case where the USD/CAD ignores RSI conditions and drop below 1.3390, the odds of witnessing a bumpy south-run towards February’s low of 1.3262 can’t be ruled out.
On the contrary, the aforementioned 61.8% Fibonacci retracement level around 1.3490, also known as the golden Fibonacci ratio, restricts immediate recovery moves of the USD/CAD pair ahead of the 100-EMA hurdle of 1.3535.
Should the USD/CAD price remains firmer past 1.3535, a convergence of the 200-EMA and 50% Fibonacci retracement, around 1.3565, will be a strong challenge for the pair buyers.
Above all, the USD/CAD bulls should remain cautious unless witnessing a clear upside break of the previous support line from early February, close to 1.3670 by the press time.
USD/CAD: Four-hour chart
Trend: Limited downside expected