USD/CAD Price Analysis: Justifies Monday’s Gravestone Doji to drop towards 1.3100
- USD/CAD takes offers to refresh intraday low after posting a bearish candlestick the previous day.
- RSI inaction around the overbought territory also favor the pullback moves.
- 10-DMA, three-week-old support line lure sellers during further downside.
- Bulls need to cross July’s top for conviction, 1.3200 guards immediate rebound.
USD/CAD returns to the bear’s table, after an effort to leave the place the previous day, as it drops to 1.3130 during Tuesday’s Asian session. In doing so, the Loonie pair justifies the bearish candlestick formation, as well as a pause in the further bullish bias, during the inaction session.
With this, the quote is likely declining towards the 1.3100 threshold. It should, however, be noted that the 10-DMA near 1.3070 could restrict the short-term downside of the pair afterward.
In a case where the USD/CAD bears dominate past 1.3070, the convergence of an upward sloping support line from August 11 and the 61.8% Fibonacci retracement of the July-August fall, near 1.3030, may limit the further declines ahead of the 1.3000 psychological magnet.
Alternatively, recovery moves need to cross the previous day’s top surrounding 1.3175 to reject the bearish candlestick formation.
Even so, the yearly peak marked in July, around 1.3225 appears a tough nut to crack for the USD/CAD bulls to crack to keep the reins.
USD/CAD: Daily chart
Trend: Further downside expected