• USD/CAD picks up bids to consolidate Tuesday’s losses amid sluggish session.
• Impending bear cross on MACD keeps sellers hopeful.
• Four-day-old support line adds to the downside filter.

USD/CAD struggles to defend the corrective pullback from the key moving averages as the quote retreats to 1.2850 during early Wednesday morning in Europe.

In doing so, the Loonie pair drops back to the upward sloping support line from August 12 as the MACD teases sellers.

Considering the quote’s failure to keep the bounce off the 100-SMA and 50-SMA, as well as the bearish MACD signals, the USD/CAD prices are likely to remain soft.

However, a clear downside break of the stated support line and the SMA confluence, around 1.2845-40, becomes necessary for the pair bears to retake control.

Following that, a slump towards the 23.6% Fibonacci retracement level of August 05-11, near 1.2790, can’t be ruled out.

Meanwhile, recovery moves need to cross the 61.8% Fibonacci retracement level of 1.2890 to convince buyers.

Even so, a downward sloping resistance line from August 05, close to 1.2920, could act as the last defense of the USD/CAD bears.

Overall, USD/CAD is likely to remain sidelined, weak for the short-term, as traders await the key Fed Minutes.

USD/CAD: Four-hour chart

Trend: Further weakness expected