- USD/CAD retreats from 10-week top, struggles to extend rebound from late October.
- Bullish MACD signals, two-week-old ascending trend line favor buyers.
- 61.8% Fibonacci retracement, tops marked in September, August also challenge buyers.
USD/CAD bulls take a breather around the highest levels since late September, easing to 1.2780 during the early Asian session on Wednesday.
In doing so, the Loonie pair steps back from a downward sloping trend line stretched from October 2020 amid overbought RSI signals. Adding to the hopes of a pullback are the multiple strong resistances that challenge the quote’s run-up beyond the stated resistance line around 1.2795.
That said, the 1.2800 threshold and 61.8% Fibonacci retracement of September 2020 to June 2021 fall, at 1.2880, offer short-term challenges to the USD/CAD pair’s upside moves.
Even if the quote rises past 1.2880, tops marked during September and August, respectively around 1.2900 and 1.2950, also offer a bumpy road to the north.
Alternatively, pullback moves remain less worrisome until staying beyond a two-week-old support line, close to 1.2690 at the latest. Before that, 50.0% Fibo. level of 1.2710 may offer nearby support.
In a case where the USD/CAD prices drop below 1.2710, April’s high around 1.2655 and the early November’s top near 1.2605 will be in focus.
USD/CAD: Daily chart
Trend: Pullback expected