Recovery remains capped around 1.2600
- USD / CAD soars around intraday high, defying bears after three days of falling.
- Bearish MACD, trading supported below key Fibonacci retracement levels, SMA hints at underlying weakness.
- Monthly horizontal support prevents immediate downside, a fortnightly downtrend line adds to filters on the upside.
USD / CAD defends the 1.2600 level while registering a three-day downtrend early Tuesday.
In doing so, the quote continues to rebound from a one-month horizontal area, but remains below key Fibonacci (Fibo.) Retracement levels of early September advances amid bearish MACD signals.
Thus, the corrective pullback could remain less attractive until it remains below 61.8% Fibo. level around 1.2650.
The 200-SMA and a descending resistance line from September 20 are also acting as barriers to the upside, near 1.2665 and 1.2705 respectively.
In the event that USD / CAD buyers manage to break through the 1.2705 hurdle, the late September high near 1.2775 will be the center of attention.
Alternatively, pullbacks may target the monthly retest of horizontal support, near 1.2555, a breakout of which will direct USD / CAD sellers towards the latest monthly low of 1.2493.
During the price weakness after 1.2493, the July low around 1.2420 will be crucial to follow.
USD / CAD: four hour chart
Trend: new weakness expected