- USD / CAD bears catch their breath around the 50% Fibonacci retracement level.
- A confluence of 100-day EMA, 61.8% Fibonacci retracement offers strong downside support.
- A seven-week bearish trend line caps the pair’s short-term rise.
USD / CAD drops to 1.3940 / 35 in the middle of Tuesday morning’s trading session. The pair fell to its lowest since May 11 the day before, but plans to extend the fall below 50 EMA days. It should be mentioned that the 50% Fibonacci retracement of the rise from late February to March of the month seems to further limit the decline in the pair.
Given the pair’s sustained trading below the 50-day EMA, sellers will look for a sustained break below the 50% Fibonacci retracement level of 1.3935 to extend the recent decline to the low of 30 April of 1.3850.
However, the 100-day EMA and the 61.8% Fibonacci retracement around 1.3765 / 60 will verify the declines during a further decline.
Alternatively, a clear break above the 50-day EMA level of 1.3952 will have to cross a downtrend line from March 31, currently near 1.4130, to remind the bulls.
USD / CAD daily chart
Trend: continuation of the expected decline