Not only a downside break of the monthly bullish channel but sustained trading beneath the 100-SMA also keeps USDCAD sellers hopeful ahead of Canada’s Consumer Price Index (CPI) data on Wednesday. Adding strength to the bearish bias is the downward sloping RSI (14) since the last week. That said, the 1.2800 appears immediate support for the quote ahead of directing it towards the 200-SMA level surrounding 1.2720. Any further downside, however, hinges on the pair’s ability to conquer the 1.2660-65 horizontal area comprising the 61.8% Fibonacci retracement level of April-May upside, as well as mid-April tops.
Meanwhile, the 100-SMA level near 1.2875 limits the USDCAD pair’s immediate recovery moves before highlighting the lower line of the aforementioned channel, previous support around 1.2930. In a case where the pair rises past 1.2930, the weekly high of 1.2981 and the 1.3000 psychological magnet could test the buyers prior to highlighting the north-run towards the monthly peak close to 1.3075.
Overall, USDCAD has already flashed bearish confirmation on the chart but today’s data also needs to back the move.