The eight-week descending trend line and the 61.8% Fibonacci retracement levels are limiting the pair's incline in the near term.
A sustained breakout of the 50-day SMA will push the price up to the 100-day SMA.
The top of the early month could challenge the sellers in the event of a pullback.
USD/CAD rises USD/CAD to the 1.3160 area as it heads towards the European open on Monday. The pair recently breached the 50-day SMA for the first time since early December. With this said, prices are likely to face the levels of the 100-day simple moving average.
However, the confluence of the multi-week resistance line from December 3 and the 61.8% Fibonacci retracement levels of the pair's September 2019 to January 1 decline could challenge the bulls around the 1.3200 area.
In case buyers focus more on MACD signals MACD Bullish and above 1.3200 on a daily closing basis, December highs near 1.3320 will reappear on the charts.
Alternatively, the 50-day SMA and the 50% Fibonacci retracement levels could limit the pair's declines at the moment near the 1.3145/40 region, which if broken could push prices lower towards the Jan 9 high near the From the 1.3105 area.
If the pair drops below 1.3105 and also below 1.3100, activating stop-loss around 1.3080 could lead the bears to target 1.3030 and the psychological barrier of 1.3000.
USD/CAD pair USD/CADdaily chart
direction: expected decline