- USD/CAD licks its wounds after stepping back from six-week top the previous day.
- Overbought RSI conditions, pullback from channel resistance suggest further consolidation.
- The mid-August high can offer immediate support, bulls may target August 07 peak on defying the channel pattern.
USD/CAD seesaws around 1.3300 during the initial Asian session on Wednesday. The loonie pair surged to the highest since August 12, before bouncing off to 1.3305, on Tuesday.
The pair’s pullback can be attributed to an upward sloping channel established since August 27. Also helping USD/CAD retracement from the upper line of the bullish pattern could be overbought RSI conditions.
As a result, short-term sellers targeting the August 14 top near 1.3270 may keep the reins. However, the quote’s further declines can be probed by September 08 high near 1.3255.
Also acting as the tough downside supports are the 200-bar SMA level of 1.3182 and the lower line of the aforementioned channel near 1.3170.
Meanwhile, the recent high near 1.3345, followed by the channel resistance near 1.3355, can probe USD/CAD bulls during a fresh upside.
It should, however, be noted that the August 07 high surrounding 1.3400 and July 30 peak close to 1.3460 can lure the bulls beyond 1.3355.
USD/CAD four-hour chart
Trend: Pullback expected
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