USD/CAD Price Analysis: Signals pullback towards 1.3735

• USD/CAD keeps pullback from three-day-old resistance line, pokes immediate support.
• RSI conditions favor sellers aiming for the 200-SMA.
• Bulls need validation from yearly peak for a further upside move.

USD/CAD teases sellers around an immediate support line near 1.3775 during Tuesday’s Asian session. In doing so, the Loonie pair justifies the previous day’s failure to cross a three-day-old resistance line, as well as the bearish divergence on the RSI (14).

That said, the quote is likely to break the nearby support of 1.3775, which in turn could quickly drag prices toward the 200-HMA support level near 1.3735. However, Monday’s bottom surrounding the 1.3700 theshold could challenge the pair bears afterward.

Also acting as a downside filter is a horizontal area surrounding 1.3675 that comprises the levels marked since the last Thursday.

In a case where the USD/CAD prices decline below 1.3675, the odds of witnessing a slump toward the monthly low near 1.3500 can’t be ruled out.

Meanwhile, an upside break of the ascending resistance line from Thursday, near 1.3785 by the press time, could recall the buyers trying to renew the yearly top marked the last month, currently around 1.3840.

In that case, April 2020 bottom surrounding 1.3960 will gain the market’s attention as the strong hurdle.

Overall, USD/CAD is likely to witness a pullback but a reversal of the present bullish trend is out of the question at the moment.

USD/CAD: Hourly chart

Trend: Pullback expected