USD/CAD Price Analysis: Sellers approach 1.3380 support confluence

• USD/CAD holds lower ground after falling the most in three weeks the previous day.
• Convergence of 100-SMA, fortnight-old ascending trend line challenges sellers.
• Any recovery remains elusive below downwards-sloping resistance line from mid-October.

USD/CAD remains depressed around 1.3420, despite bouncing off the intraday low of 1.3408, as sellers cheer a downside break of 200-SMA during early Thursday. That said, the Loonie pair dropped the most in three weeks the previous day while breaking the key Simple Moving Average (SMA).

In addition to the SMA breakdown, the bearish MACD signals and a clear U-turn from the seven-week-old resistance line, around 1.3585 by the press time, also keep the USD/CAD bears hopeful.

However, the 100-SMA and an ascending support line from mid-November, close to 1.3380, appear a tough nut to crack for the USD/CAD bears.

Following that, a downward trajectory to poke November’s low of 1.3226 can’t be ruled out.

Alternatively, recovery moves may initially aim for the 1.3500 round figure before jostling with the 1.3510 resistance confluence including the 200-SMA and 38.2% Fibonacci retracement level of the October-November downside.

In a case where USD/CAD remains firmer past 1.3510, the bulls could challenge the aforementioned key resistance line from October near 1.3585 before taking control.

Overall, USD/CAD bears may take a breather around 1.3380 but aren’t likely to relinquish control.

USD/CAD: Four-hour chart

Trend: Limited downside expected