USD/CAD Price Analysis: Bulls need validation from 1.2880 for further upside

• USD/CAD eases from three-month high, after five-day uptrend.
• 61.8% Fibonacci retracement level, RSI conditions challenge buyers.
• Tops marked during December 2020, August 2021 lures bulls past 1.2880.
• 10-DMA restricts immediate downside, two-month-old support line becomes the key.

USD/CAD bulls take a breather around the highest levels since late September, easing to 1.2857 during Wednesday’s Asian session.

In doing so, the Loonie pair retreats below 61.8% Fibonacci retracement (FIbo.) level of September 2020 to June 2021 downside, around 1.2880, amid nearly overbought RSI conditions.

Even so, the 10-DMA level of 1.2767 restricts immediate losses ahead of the 50% retracement close to 1.2710.

Also acting as strong support is an upward sloping trend line from late October, surrounding 1.2650 at the latest.

Alternatively, a clear upside break of the 1.2880 hurdle will serve as a trigger to the further advances targeting tops marked during late 2020 and 2021, around 1.2950-60.

Furthermore, a descending trend line from September 2020 near 1.2980 and the 1.3000 threshold will become additional challenges for the USD/CAD bulls to cross past 1.2960.

USD/CAD: Daily chart

Trend: Pullback expected