USD/CAD Price Analysis: Further downside hinges on 1.3070 and US/Canada data

• USD/CAD remains on the back foot at the lowest level in 10 months, licking its wounds after three-day downtrend.
• Convergence of 25-month-old rising support line, 200 SMA and 100 SMA constitute the key support to watch for Loonie bears.
• Corrective bounce remains elusive below November 2022 low.

USD/CAD licks its wounds at the lowest level in 10 months, making rounds to 1.3110-3100 during early Friday morning in Asia.

In doing so, the Loonie pair prods the three-day losing streak amid the US Dollar’s corrective bounce ahead of the second-tier US and Canada data, scheduled for publishing on Friday. Notable among them are the preliminary readings of July’s US Michigan Consumer Sentiment Index, as well as the Five-Year Consumer Inflation Expectations. Furthermore, Canada's Manufacturing Sales for May will also be importat for clear directions.

Apart from the aforementioned catalysts, the bearish MACD signals also exert downside pressure on the USD/CAD price.

However, a convergence of the 200 and 100 SMA on the weekly formation, as well as including an ascending support line from June 2021, together constitute 1.3070 as the key downside support to watch for clear directions.

Although the RSI conditions are nearly overbought and suggest limited downside room for the USD/CAD pair, a clear break of 1.3070 will make the pair vulnerable to declining towards the 1.3000 psychological magnet and then to the September 2022 bottom of around 1.2950.

On the flip side, a weekly close beyond the November 2022 low of near 1.3230 becomes necessary to recall the short-term USD/CAD bulls.

Even so, the monthly high and a downward-sloping resistance line from early March, respectively near 1.3390 and 1.3540, can challenge the USD/CAD buyers before giving them control.

USD/CAD: Weekly chart

Trend: Corrective bounce expected