USD/CAD Price Analysis: Bears challenge 38.2% Fibonacci retracement

• USD/CAD fails to capitalize the previous session’s gains on Wednesday.
• Bulls face stiff resistance near the 1.2580-1.2620 zone.
• Momentum oscillator holds onto the oversold zone with negative bias.

USD/CAD accumulates losses on Wednesday in the European trading session. The pair opened higher, however, not able to preserve the momentum and retreated towards the lower level.

At the time of writing, USD/CAD is trading at 1.2580, down 0.17% for the day.

USD/CAD daily chart

On the daily chart, the USD/CAD pair has been taking strong support near the 1.2550 level with multiple bottom formations.

If price remains below the session low, it could test the previous day’s low at 1.2538 as the first downside target. 

The Moving Average Convergence Divergence (MACD) indicator holds over the oversold with bearish crossover. Any downtick in the MACD could intensify the selling pressure toward the 1.2500 horizontal support level.

Next, the USD/CAD bears would aim for the 50% Fibonacci retracement, which extends from the low of 1.2129, at 1.2477.

Alternatively, if price moves higher then it could be to the 23.6% Fibonacci retracement at 1.2650.

A daily close above the mentioned level would prompt bulls to continue with the prevailing upside momentum.

The next area of support for the market participant would be the 1.2700 horizontal resistance level followed by the high of July 21 at 1.2730.

USD/CAD additional levels