Bears attack 1.2800 to retake controls
USD/CAD snaps three-day uptrend, eases from monthly peak.
Firmer Momentum keeps buyers hopeful but RSI conditions, monthly resistance line challenge further upside.
Convergence of 20-DMA, 12-day-old support line challenges sellers.
USD/CAD sellers attack 1.2800 threshold during the first negative daily performance amid early Tuesday.
The Loonie pair rose to the highest since August 20 the previous day. However, failures to stay firmer beyond an ascending resistance line from August 27 joined nearly overbought RSI conditions to trigger the latest pullback moves.
Even so, a sustained trading below the two-month-old horizontal area surrounding 1.2800 becomes necessary for the USD/CAD sellers to take fresh entry.
Following that, the early September high near 1.2760 and the 1.2700 round-figure may entertain traders ahead of challenging them with 1.2650-55 support confluence including 20-DMA and an ascending support line from September 03.
Should USD/CAD drops below 1.2650, it will confirm the rising wedge bearish chart pattern and will become vulnerable to decline towards the late July lows near 1.2420.
Meanwhile, recovery moves need to cross the stated resistance line, around 1.2830 to recall the bulls.
Following that, the 1.2900 round figure and the yearly peak of 1.2949 will be in focus.
Hence, USD/CAD teases pullback but the bulls remain hopeful unless witnessing a downside break of 1.2650.
USD/CAD: Daily chart
Trend: Pullback expected