- USD/CAD extends pullback from 200-DMA, fades bounce off one-week low.
- Descending momentum line, failures to rebound direct bears to the key support line.
- March-April tops add to the upside filters before the monthly top.
USD/CAD stays depressed near 1.2540, down 0.08% intraday, amid the initial Asian session trading on Tuesday. The Loonie pair refreshed one week low the previous day while stretching the previous day’s U-turn from 200-DMA.
With the downward sloping Momentum line favoring USD/CAD weakness below the key moving average, sellers are on their way to an ascending support line from early June, around 1.2490.
However, any further downside past 1.2490 will need validation from the last month’s top surrounding 1.2485, a break of which should direct the pair sellers toward May’s high near 1.2350.
Meanwhile, the pair’s short-term recovery moves remain capped by a 200-DMA level of 1.2607.
Even if the USD/CAD bulls manage to cross the key DMA hurdle, highs marked during March and April, around 1.2650-55, will be crucial to watch before targeting the monthly peak of 1.2807.
USD/CAD: Daily chart
Trend: Further weakness expected