USD/CAD bulls are under renewed pressure as the pair currently trades near the critical support area of 1.26000. The pair had briefly moved below 1.2600 on Monday but managed to close at 1.2611 that formed a Doji pattern. The downwards pressure is largely attributed to the weakness in the USD. The US Dollar Index (DXY) currently at 90.11 and a breach below 90.00 is on the cards. The pair’s intraday support levels are at 1.26000 and 1.2577. The near-term resistance areas are at 1.2638 and 1.2666.
The current price is almost the lowest since April 2018 and a breach below 1.26000 would further extend the downside. The technical indicators are presenting a bearish picture with SMA-14 indicating resistance at 1.2688 and SMA-50 showing resistance area at 1.2735. The RSI is at 39 and the fact that it is still away from an absolute oversold zone further favors the bears. The mid-Bollinger band is at 1.2723 and the lower band support area is at 1.2574. Currently, a breach below 1.26000 on the 4-hourly chart would favor selling entries with a target of 50 to 60 pips. The stop-loss for this trade would be at or slightly above the 1.2638 resistance area.
Bears require an intraday closing below 1.26000 to continue their hold and take the pair lower towards 1.2555 and 1.2520 in the coming days. On the upside, a price action above SMA-14 (1.2688) is needed for the bulls to get back into the game and build a recovery pattern.
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