On Wednesday, the USD/CAD shortly pierced the combined support of the 1.2720/1.2732 zone and the lower trend line of the November channel up pattern. Although, afterwards the rate recovered to the 1.2830 level, which provided resistance.
The resistance was enough for a retracement down to occur. By the start of Thursday’s European trading hours, the pair had reached the 1.2780 level and the 50-hour simple moving average at it.
A potential move below the 1.2780 level could result in a test of the support of the November channel up pattern’s lower trend line near 1.2760. Below the trend line, the 1.2720/1.2732 support zone and the 200-hour simple moving average might stop a decline.
On the other hand, a recovery of the USD against the CAD might result in the test of this week’s high levels at 1.2830/1.2840.