USD/CAD technical analysis: Poised to weaken farther, break below 1.3100 mark looks a distinct possibility

• The USD/CAD pair met with some fresh supply at the start of a new trading week and weakened farther below the 1.3200 handle, back closer to multi-month lows.
• The ongoing upsurge in Crude Oil prices continued benefitting the commodity-linked currency - Loonie and turned out to be one of the key factors exerting pressure.

Given last week’s decisive break below an important confluence support – comprising of the very important 200-day SMA and near five-month-old ascending trend-channel, the price action clearly indicates that the near-term bearish pressure might still be far from being over.

Meanwhile, technical indicators on hourly charts have managed to move away from oversold conditions and maintained their bearish bias on the daily chart, reinforcing the near-term bearish breakdown and supporting prospects for an extension of the ongoing bearish trajectory. 

A fresh wave of selling below mid-1.3100s (recent swing lows) now seems to accelerate the fall towards the 1.3100 round figure mark before the pair eventually drops to challenge yearly lows, around the 1.3070-65 region touched in early- February. 

On the flip side, any attempted recovery back above the 1.3200 handle now seems to confront some fresh supply near the 1.3245-50 region and is likely to remain capped at the confluence support breakpoint, around the 1.3275-80 zone.

USD/CAD daily chart