USD/CAD Price Analysis: Pullback towards 1.3550 seems imminent as Oil price recovers, Greenback drops
- USD/CAD stays pressured while justifying Monday’s bearish Doji, reversal from key resistance line.
- Looming bear cross on MACD, overbought RSI also suggest Loonie pair’s pullback.
- Three-week-old rising support line restricts immediate downside ahead of 200-DMA.
- Bulls need validation from tops marked in May, April for retaking control.
USD/CAD remains on the back foot around 1.3600 after reversing from a three-month high the last week, not to forget the previous day’s U-turn from an important resistance line. That said, the Loonie pair teases bears around the intraday low of 1.3590 during early Tuesday morning in Europe.
In doing so, the Loonie pair not only defends the previous day’s U-turn from a four-month-old resistance line but also justifies the overbought RSI (14) line and the impending bear cross on the MACD indicator. Additionally luring the USD/CAD sellers is the previous day’s Doji candlestick on the Daily chart.
With this, the Loonie pair appears all set to decline towards an upward-sloping support line from August 04, close to 1.3550 by the press time. However, the 200-DMA level of 1.3460 will challenge the USD/CAD pair’s further downside.
Also acting as the downside filter is the previous monthly high of near 1.3385 and May’s bottom surrounding 1.3315.
On the flip side, a daily closing beyond the aforementioned resistance line stretched from late April, around 1.3615, becomes necessary to convince the USD/CAD buyers.
Even so, the tops marked in May and April, near 1.3655 and 1.3670 in that order, will challenge the bulls before giving them control.
It’s worth mentioning that the latest rebound in the Oil price, Canada’s key export item joins the US Dollar’s retreat ahead of the CB Consumer Confidence data for August to weigh on the USD/CAD pair of late.
USD/CAD: Daily chart
Trend: Further downside expected