The USDCAD is facing difficulty around its two-month low even though it has recorded its first daily increase in five. Nehcap believes that there will be more decline to come.

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• USD/CAD struggles near two-month low after posting the first daily gain in five.

The pair currently trades last at 1.33656.

The previous day high was 1.3371 while the previous day low was 1.3313. The daily 38.2% Fib levels comes at 1.3335, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3349, expected to provide support.

USD/CAD retreats from 1.3383, sidelined near 1.3365 amid early hours of Tuesday’s Asian session. In doing so, the Loonie pair fails to defend the previous day’s corrective bounce off a seven-month-old ascending support line while staying near the lowest levels in two months.

That said, the below 50.0 levels of the RSI (14) line joins an upward-sloping support line from the mid-November 2022 to restrict short-term downside of the USD/CAD pair around 1.3330.

However, the bearish MACD signals and the Loonie pair’s sustained trading below the 200-day Exponential Moving Average (EMA), close to 1.3410 by the press time, keeps the sellers hopeful.

Adding strength to the 200-EMA hurdle is the 10-EMA level surrounding 1.3420, which in turn highlights the 1.3410-20 as the short-term upside limit for the USD/CAD pair.

Should the quote manage to cross the 1.3420 resistance, the previous weekly high of around 1.3460 can act as an extra filter towards the north before welcoming the USD/CAD buyers.

On the flip side, a daily closing below the aforementioned key support line, around 1.3330 at the latest, can quickly fetch the USD/CAD price towards the yearly low of 1.3262. However, the bottoms marked in May and April, respectively near 1.3315 and 1.3300 will challenge the Loonie bears.

It should be noted that the November 2022 low of near 1.3226 can act as the extra downside filter for the Loonie pair bears to watch before taking control.

Trend: Further downside expected

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3365 at the time of writing. Pair opened at 1.3338 and is trading with a change of 0.20% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.3492, 50 SMA 1.3488, 100 SMA @ 1.3515 and 200 SMA @ 1.3514.

The previous day high was 1.3371 while the previous day low was 1.3313. The daily 38.2% Fib levels comes at 1.3335, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3349, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.331, 1.3283, 1.3252
• Pivot resistance is noted at 1.3368, 1.3399, 1.3426

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