• USD/CAD bears flirt with two-month low amid oversold RSI conditions.
• Key Fibonacci retracement support, previous resistance line challenge further downside.
• 20-SMA restricts immediate upside, 1.2730 is the key hurdle.

USD/CAD licks its wounds near the lowest levels since late January, picking up bids to 1.2590 heading into Tuesday’s European session.

The downbeat RSI conditions, nearly oversold, hint at the bear’s inability to keep reins.

However, the loonie pair’s sustained trading below the key SMAs keep USD/CAD prices directed towards the 78.6% Fibonacci retracement (Fibo.) of January-March upside, around 1.2550.

That said, further recovery moves may aim for the 20-SMA level of 1.2615 before directing the USD/CAD bulls towards the 50% Fibo. level of 1.2675.

Even so, the pair buyers remain skeptical until the quote rises past 1.2725-30 resistance confluence including the 200-SMA And 38.2% Fibonacci retracement level.

On the contrary, the 78.6% Fibonacci retracement level of 1.2550 and previous resistance line from March 15, around 1.2530, lures the USD/CAD bears before directing them to January’s low surrounding 1.2450.

USD/CAD: Four-hour chart

Trend: Corrective pullback expected