• Loonie bulls are losing momentum after finding a responsive buying action near the 61.8% Fibo retracement.
• The RSI (14) is attempting to violate its bearish range of 20.00-40.00.
• For an upside move, the greenback bulls need to overstep the 20-EMA at 1.2690.

The USD/CAD pair has witnessed a firmer rebound after hitting a low of 1.2629 on Tuesday. A significant responsive buying action indicates signs of a value bet, which has pushed the asset to near 1.2670. Some exhaustion signs near the crucial support of 1.2650 are also advocating a bullish reversal in the counter.

On a four-hour scale, the asset has experienced a cushion of around 61.8% Fibonacci retracement at 1.2663. The Fibo retracement tool is placed from April’s low at 1.2403 to May’s high at 1.3077.

The 20- and 50-period Exponential Moving Averages (EMAs) at 1.2690 and 1.2748 respectively are declining, which still favors the downside filters.

However, the Relative Strength Index (RSI) (14) is attempting to overstep the bearish range of 20.00-40.00, which signals a reversal in the counter.

An upside move above the 20-EMA at 1.2690 will drive the asset towards the 50-EMA at 1.2748. Breach of the latter will expose the asset for an upside move towards the round-level resistance at 1.2800.

On the flip side, the loonie bulls could tighten their grip if the asset drops below Tuesday’s low at 1.2629 decisively. An occurrence of the same will drag the asset towards March 28 high at 1.2593, followed by April 14 low at 1.2521.

USD/CAD four-hour chart