- USD/CAD once again met with some fresh supply near the 1.3155-60 confluence resistance.
- The set-up favours bearish traders and supports prospects for an extension of the downfall.
- Only a sustained breakthrough the mentioned barrier will negate the near-term bearish bias.
The USD/CAD pair failed to capitalize on its early uptick and retreated around 50 pips from daily swing highs, albeit managed to find some support ahead of the 1.3100 mark. The intraday positive move once again faltered near a confluence resistance, comprising of over one-week-old descending trend-line and 200-hour SMA.
Given the repeated failures near the mentioned barrier, a sustained break below the 1.3100 mark will be seen as a fresh trigger for bearish traders and pave the way for an extension of the recent downward trajectory. Meanwhile, technical indicators on hourly/daily charts maintained their negative bias and support prospects for additional weakness.
Hence, a subsequent fall towards six-week lows, around the 1.3080 region touched on Wednesday, looks a distinct possibility amid the emergence of some fresh selling around the greenback. Some follow-through selling might then turn the USD/CAD pair vulnerable to accelerate the slide further towards challenging the key 1.3000 psychological mark.
On the flip side, any attempted positive move might continue to face stiff resistance near the 1.3155-60 confluence region. However, a sustained breakthrough will negate any near-term negative bias and prompt some aggressive short-covering move. The pair might then aim to surpass the 1.3200 mark and test the 1.3235-40 supply zone.
USD/CAD 1-hourly chart
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Technical levels to watch
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