- USD/CAD remains down around a nine-week low.
- A clear break of the 61.8% Fibonacci retracement level directs the decline to the January low.
- RSI conditions can test the bears around the yearly low, 78.6% Fibo.
- Previous support line, 200-DMA adds filters to the upside.
USD/CAD is struggling to defend the 1.2500 level around a two-month low, despite resuming offers around 1.2530 in Friday’s first Asian session.
The pair of loonies fell to their lowest levels since January 21 the day before breaking the 61.8% Fibonacci retracement (Fibo.) from October to December 2021 on the upside amid bearish MACD signals. That said, the southern run previously gained support from a clear break of the 200-DMA and multi-day rising trendline.
With that, USD/CAD seems to have a smooth ride to the January 2022 low around 1.2450.
However, 78.6% Fibo. a level near 1.2430 will challenge the pair as the RSI moves closer to oversold territory.
In an event that the USD/CAD bears conquer the support at 1.2430, the pair becomes vulnerable to test the late 2021 low around 1.2290.
Alternatively, the corrective pullback may initially target the key Fibonacci retracement resistance level near 1.2545.
Then, the support-turned-resistance line and the 200-DMA around 1.2575 and 1.2615 respectively will challenge the USD/CAD bulls.
It should be noted that the February low near 1.2635 will act as an additional northward filter as the pair rises past 1.2615.
USD/CAD: daily chart
Trend: further weakness expected