USD/CAD Price Analysis: Bulls trying to defend 200-DMA/descending channel confluence support

• USD/CAD continues losing ground for the second consecutive session on Monday.
• Bearish traders now await a sustained weakness below the very important 200-DMA.

The USD/CAD pair edged lower for the second consecutive session on Monday – also marking its fifth day of a negative move in the previous six – and dropped to fresh monthly lows in the last hour.

The downward momentum dragged the pair below the 23.6% Fibonacci level of the 1.2952-1.3330 positive move, albeit the pair has still managed to hold just above the very important 200-day SMA.

USD/CAD daily chart

The mentioned support also coincides with the lower end of a short-term descending trend-channel formation on the 1-hourly chart and should now act as a key pivotal point for short-term traders.

USD/CAD 1-hourly chart

A convincing break through the said confluence support, currently near the 1.3220 region, will suggest that the pair might have topped out in the near-term and support prospects for further weakness.

The pair might then turn vulnerable and seems more likely to accelerate the slide further towards 38.2% Fibo. level, around the 1.3190 region, before eventually falling to the 1.3140 level (50% Fibo. level).

On the flip side, any attempted bounce might continue to confront some fresh supply near the 1.3265-70 region, above which the pair is likely to aim towards reclaiming the 1.3300 round-figure mark.

Technical levels to watch