USD/CAD Price Analysis: Eyes further downside towards 1.2730 support confluence

• USD/CAD holds lower ground after reversing from three-week-old horizontal resistance.
• Downbeat MACD signals, RSI conditions also favor sellers.
• 200-SMA, fortnight-old ascending trend line restricts short-term declines.

USD/CAD licks its wounds around 1.2770 during early Wednesday’s Asian session, following the heaviest daily fall in a week.

The Loonie pair rose to the highest levels since the last Wednesday before reversing from a fortnight-long horizontal hurdle.

The pullback also gains support from descending RSI line, not oversold, as well as an impending bear cross, of the MACD line over the signal line.

With this, USD/CAD bears are on the way to testing the 1.2730 support confluence, including the 200-SMA and an ascending trend line from March 03.

However, any further downside will be challenged by a horizontal area comprising multiple levels marked since February 23, between 1.2680 and 1.2685.

Alternatively, recovery moves not only need to cross the aforementioned resistance-zone surrounding 1.2872-77 but also need to refresh the monthly low, currently around 1.2900, to convince USD/CAD bulls.

Following that, the year 2021 top near 1.2965 and the 1.3000 threshold will be in focus.

USD/CAD: Four-hour chart

Trend: Further weakness expected