• USD/CAD struggles to defend buyers around seven-week low.
• Convergence of an ascending trend line from October 2021, support line of a three-week-old falling channel restricts immediate downside.
• RSI conditions challenge further downside, 200-DMA, bearish channel keep sellers hopeful.

USD/CAD pares a corrective pullback from a seven-week low of around 1.2580 during Tuesday’s Asian session.

In doing so, the Loonie pair portrays another failure to overcome the 61.8% Fibonacci retracement (Fibo.) of October 2021 to May 2022 upside, near 1.2590.

Also keeping USD/CAD bears hopeful are the bearish MACD signals and downward sloping RSI (14) line, not oversold.

It’s worth noting, however, that a limited downside gap for the RSI (14), before visiting the oversold territory, highlights the importance of the 1.2500 support confluence including an ascending support line from October 2021 and a lower line of a three-week-old descending trend channel.

Should the USD/CAD prices drop below 1.2500, the odds of its south-run towards the yearly low marked in April around 1.2400 can’t be ruled out.

On the contrary, the 200-DMA level surrounding 1.2665 restricts the pair’s recovery moves ahead of the stated channel’s upper line, near 1.2700 by the press time.

In a case where the USD/CAD pair remains firmer past 1.2700, it defies the bearish chart pattern and can brace for March’s high near 1.2900.

USD/CAD: Daily chart

Trend: Limited weakness expected