USD/CAD Price Analysis: Retreats from monthly resistance line below 1.3700

• USD/CAD pulls back from intraday high to pare daily gains.
• Weekly support line holds the key for bear’s entry.
• Buyers need validation from November’s peak to keep the reins.

USD/CAD registers another failure to cross the one-month-old resistance line as it drops to 1.3655 amid the initial hour of Thursday’s European trading session.

The Loonie pair’s latest declines also take clues from the impending bear cross on the MACD, as well as RSI (14) pullback from the overbought territory.

Although the intraday bears are having an upper hand by the press time, an upward-sloping support line from Monday, close to 1.3650, restricts the USD/CAD pair’s immediate downside.

Following that, a southward trajectory towards the 200-Simple Moving Average (SMA) level surrounding 1.3480 can’t be ruled out.

However, a three-week-old ascending trend line near 1.3420 appears crucial for the USD/CAD seller’s further dominance as a break of which won’t hesitate to poke the previous monthly low of 1.3226.

Alternatively, an upside clearance of the monthly resistance line near 1.3685 will need validation from the 1.3700 threshold and November’s peak of 1.3808 to convince the USD/CAD bulls.

In that case, the 1.3855-60 and the 1.3900 level could also probe the Loonie pair’s further upside before highlighting the 1.4000 psychological magnet.

USD/CAD: Four-hour chart

Trend: Limited downside expected