In the early European session on Tuesday, the USD/CAD pair continues its four-day decline, trading at 1.3405, marking a 0.04% loss for the day. The Loonie, bolstered by elevated oil prices due to ongoing geopolitical tensions in the Middle East, maintains its strength, putting downward pressure on the USD/CAD pair.
From a technical standpoint, the bearish bias persists for USD/CAD, with the pair positioned below the 50- and 100-period Exponential Moving Averages (EMA) on the four-hour chart. The Relative Strength Index (RSI) further supports the bearish sentiment, residing below the 50-midline in bearish territory.
A potential bearish breakout beneath the lower limit of the Bollinger Band at 1.3393 may lead to a decline towards the January 11 low at 1.3350. Subsequent selling pressure could expose the psychological support level of 1.3300, on the way to the January 2 low at 1.3228.
On the upside, the initial resistance for the pair is at the 100-period EMA at 1.3440, with an additional hurdle at the 50-period EMA at 1.3450. Further upside challenges include the upper boundary of the Bollinger Band at 1.3516, followed by the January 25 high at 1.3534. Traders are closely monitoring these technical levels as the USD/CAD pair navigates ongoing market dynamics, including geopolitical developments and oil price fluctuations.