USD/CAD Price Analysis: Loonie Bulls Strengthen as Ascending Triangle Collapses to the Bottom, 1.2400 Targeted

Since April 14, the USD/CAD pair has had a steep decline following repeated failed efforts to reach a price over 1.2647. The asset has fallen below 1.2500 and appears to be headed for further decline given the price movement.

On the downside, an explosion of the ascending triangle chart formation undermined the greenback bulls. The chart pattern's horizontal resistance is drawn from the April 14 high of 1.2642, while the ascending trendline is drawn from the April 14 low of 1.2521. After breaching below the ascending triangle, the asset demonstrated a textbook case of selling.

A bear cross of the asset's 20- and 200-period Exponential Moving Averages (EMAs) at 1.2596 sparked a sharp sell-off.

The Relative Strength Index (RSI) (14) is swinging in a negative range of 20.00-40.00, indicating that a slight drop is possible as an oversold condition kicks in.

Investors should look for a pullback to the 20-EMA at 1.2520, which will provide the best opportunity to sell. After touching the 20-EMA, the asset will be dragged towards March's low of 1.2430, followed by round-level support at 1.2400.

On the other hand, bulls of the greenback may reassert control if the asset surpasses Friday's low of 1.2590, which would push the pair toward April 14 and April's highs of 1.2642 and 1.2676, respectively.

USD/CAD Hourly Chart