Categories: Markets

Sellers target the 200 hourly SMA amid a bearish technical setup

USDCAD
  • USD / CAD accelerates the slide towards the 200 hourly SMA.
  • Breakout of an ascending channel detected on the 15-minute chart.
  • 1.2778 is likely to keep recovery attempts limited.

USD / CAD is feeling the force of gravity at the start of the European session on Tuesday, affected by the retreat of the US dollar along with the yields of Treasuries.

In addition, the renewed strength seen in WTI prices appears to favor the Canadian dollar, a currency pegged to commodity prices, as the pair flirts with daily lows around the 1.2750 level.

The USD retracement also assists with a breakout of the bullish channel on the 15-minute chart, which is likely to increase the downward pressure on USD / CAD.

The bears are now targeting the support of the 200 hourly SMA at 1.2742, with the RSI approaching oversold territory at time of writing.

The slide has gained strength after USD / CAD broke the critical support at 1.2778, which is the convergence of the 50 and 100 hourly SMAs.

The latter level is likely to cap any pullback to the upside. The path of least resistance appears to the downside as the 21 hour SMA is about to cross the 50 and 100 hour SMAs from above, confirming a bearish crossover.

USD / CAD 1 hour chart

USD / CAD technical levels

.