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  • USD/CAD extended the overnight pullback from 1-1/2-week tops, around mid-1.4100s.
  • The intraday downfall showed some resilience near an important confluence support.

The USD/CAD pair extended the previous day’s retracement slide from mid-1.4100s, or 1-1/2 week tops and witnessed some follow-through selling through the mid-European session on Tuesday.

The pullback showed some resilience near 38.2% Fibonacci level of the 1.3851-1.4153 positive move, which coincides with 200-hour SMA and should now act as a key pivotal point for traders.

Meanwhile, technical indicators on the 1-hourly chart have drifted back into the bearish territory, albeit have still managed to hold with a mild positive bias on 4-hourly/daily charts.

The set-up warrants some caution before placing fresh bearish bets amid some renewed USD strength and ahead of Tuesday’s macro data – Canadian trade balance and the US ISM Non-Manufacturing PMI.

That said, a sustained break through the mentioned support might be seen as a fresh trigger for bearish traders and accelerate the fall further towards the key 1.40 psychological mark.

The latter marks 50% Fibo. level, which if broken might negate prospects for any further near-term appreciating move and prompt some aggressive technical selling amid surging oil prices.

On the flip side, the 1.4080-1.4100 region (around the 23.6% Fibo. level) now seems to have emerged as immediate strong resistance and might keep a lid on any attempted recovery move.

USD/CAD 1-hourly chart

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Technical levels to watch