USD/CAD Price Analysis: Bears need clear break of 1.2765 for conviction

• USD/CAD sellers attack previous resistance line from early January.
• Failures to cross 78.6% Fibonacci retracement, downbeat RSI favor bears.

USD/CAD remains pressured around an intraday low of 1.2771 as it jostles with resistance-turned-support heading into Friday’s European session.

The Loonie pair rallied to a two-month high the previous day but couldn’t stay much beyond the 78.6% Fibonacci retracement (Fibo.) of December-January downside.

The pullback move, however, battles the previous resistance line, as well as the 61.8% Fibo. level, near 1.2770-65.

Given the quote’s failure to stay beyond the key Fibonacci retracement level and the downward sloping RSI line, not oversold, USD/CAD is likely to decline further.

However, a clear break of 1.2765 becomes necessary before the bears can eye 50% Fibo. level near 1.2700. Following that, the 200-SMA, around 1.2660, will be a tough nut to crack for the USD/CAD sellers.

On the contrary, a clear upside break of the 78.6% Fibonacci retracement level of 1.2866 needs validation from the latest swing high surrounding 1.2880 to direct the USD/CAD bulls towards December 2021 top, close to 1.2965.

During the run-up, the 1.2900 round figure may offer an intermediate halt whereas the 1.3000 psychological magnet could lure the pair buyers past 1.2965.

USD/CAD: Four-hour chart

Trend: Further weakness expected