- USDCAD drops back closer to a previous strong resistance breakpoint now turned support.
- The technical set-up favours bearish traders and supports prospects for further weakness.
- The pair seems vulnerable to break below the 1.3200 handle and test 1.3175-70 support.
- Fresh bearish positions should be accompanied by stop-loss near the 1.3250-55 region.
USDCAD extended its recent retracement slide from 1.3420 region and was last seen hovering near a previous strong horizontal resistance breakpoint. This is closely followed by 200-period SMA on the 4-hourly chart, which is likely to act as a key pivotal point for short-term traders.
Meanwhile, technical indicators on hourly chart maintained their bearish bias and have just started drifting into the negative territory on the daily chart. The set-up favours bearish traders and supports prospects for an eventual breakthrough the mentioned support.
Hence, some follow-through weakness below the 1.3200 handle, en-route the next major support near the 1.3175-70 congestion zone, now looks a distinct possibility. On the flip side, immediate resistance is pegged near the 1.3250-55 horizontal zone, which should now act as a stop-loss level for short-term bearish positions.