- USD/CAD grinds lower following the biggest daily fall in a fortnight.
- Impending bear cross, trend line breakdown and receding strength of MACD’s bullish bias favor sellers.
- 21-DMA, 100-DMA lure short-term sellers while bulls need a clear break of 1.2900 for conviction.
USD/CAD bears lick the post-Fed wounds around mid-1.2700s, having declined the most in two weeks, during Thursday’s Asian session.
Although the Loonie pair remains trapped inside a 15-pip trading area around 1.2750 after the latest slump, sellers keep the reins as multiple catalysts hint at the quote’s further downside.
Among them, a clear break of the previous support line from April 21 and a bear cross of the 21-DMA over the 100-DMA act as crucial factors. Also supporting USD/CAD bears are the recently easing MACD bullish signals and steady RSI.
That said, the pair’s further downside towards 21-DMA, around 1.2690 by the press time, becomes imminent. However, the 100-DMA level of 1.2681 may test the USD/CAD declines afterward. Also likely to challenge the quote’s south-run is early April’s peak of 1.2673.
Alternatively, the corrective pullback may initially aim for the 1.2800 threshold before the mid-March top surrounding 1.2875.
It’s worth noting, however, that a confluence of the previous support line and a two-month-old horizontal line, around 1.2900, appears a tough nut to crack for the USD/CAD bulls afterward.
USD/CAD: Daily chart
Trend: Further weakness expected
