USD/CAD Price Analysis: Bears eye 1.2690 on bullish channel breakdown
- USD/CAD grinds lower after the heaviest daily fall in two months.
- Clear break of three-week-old channel, bearish MACD signals favor sellers to aim for 100-SMA.
- 200-SMA, six-week-old support line challenge bears, bulls need validation from weekly resistance line.
USD/CAD remains on the back foot around 1.2760, following a downside break of a short-term rising channel formation.
In addition to the channel’s breakdown, bearish MACD signals also direct USD/CAD sellers towards the 100-SMA level surrounding 1.2690 during Tuesday’s Asian session.
It should be noted, however, that November 12 peak near the 1.2600 threshold may entertain the pair bears past 1.2690 but a convergence of the 200-SMA and an ascending trend line from October 27, near the 1.2555-45 zone, will be a tough nut to crack for USD/CAD bears.
Alternatively, corrective pullback not only needs to restore the channel formation, by rising back beyond 1.2790, but should also overcome the weekly descending resistance line, close to 1.2850, for conviction.
Following that, an upper line of the stated channel, surrounding 1.2920 and the 1.3000 psychological magnet will be in focus.
USD/CAD: Four-hour chart
Trend; Further weakness expected