#USDCAD @ 1.36034 holds lower ground during two-day retreat from monthly high., @nehcap view: Limited downside expected (Pivot Orderbook analysis)

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• USD/CAD holds lower ground during two-day retreat from monthly high.
• Bearish MACD signals add strength to pullback moves targeting previous resistance line.
• Loonie pair’s recovery needs validation from April’s peak.

The pair currently trades last at 1.36034.

The previous day high was 1.3655 while the previous day low was 1.3601. The daily 38.2% Fib levels comes at 1.3622, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3634, expected to provide resistance.

USD/CAD remains mildly offered near 1.3600 as it defends the previous day’s U-turn from a one-month high during Monday’s sluggish Asian session, especially amid the holidays in the US.

That said, the Loonie pair’s latest weakness justifies its inability to cross a two-month-old descending resistance line, around 1.3650 by the press time. Adding strength to the downside bias are the bearish MACD signals.

With this, the USD/CAD sellers are all set to prod the previous resistance line stretched from early March, close to 1.3550. However, a convergence of the 50-SMA and a three-week-old support line, near 1.3535 at the latest, could challenge the Loonie pair’s further downside.

Even if the quote breaks the 1.3535 support confluence, the 200-SMA level of around 1.3500 can act as the last defense of the USD/CAD buyers before giving control to the Loonie pair bears.

On the contrary, the aforementioned two-month-old resistance line, close to 1.3650, restricts the immediate upside of the pair ahead of the previous monthly high of around 1.3665-70.

Following that, the late March swing high near 1.3700 may act as an additional check for the USD/CAD buyers before targeting the yearly high marked in March around 1.3860.

Overall, USD/CAD is likely to witness further downside but the room towards the south is limited.

Trend: Limited downside expected

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3603 at the time of writing. Pair opened at 1.3617 and is trading with a change of -0.10% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.3507, 50 SMA 1.3525, 100 SMA @ 1.3511 and 200 SMA @ 1.3493.

The previous day high was 1.3655 while the previous day low was 1.3601. The daily 38.2% Fib levels comes at 1.3622, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3634, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3594, 1.357, 1.354
• Pivot resistance is noted at 1.3648, 1.3678, 1.3702

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