- USD/CAD witnessed some selling on Friday amid a modest USD pullback from multi-month tops.
- An uptick in crude oil prices underpinned the loonie and contributed to the intraday selling bias.
- A combination of factors might continue to lend support to the USD and limit losses for the pair.
The USD/CAD pair edged lower through the Asian session and was last seen hovering near the lower end of its intraday trading range, just below the 1.2600 mark.
USD/CAD witnessed some selling on Friday amid a modest USD pullback from multi-month tops. An uptick in crude oil prices underpinned the loonie and contributed to the intraday selling bias. A combination of factors might continue to lend support to the USD and limit losses for the pair.
From a technical perspective, the outlook for USD/CAD rates remains skewed to the downside, as price tracks firmly below the 5 month the old descending trendline and continues to respect the downtrend extending from the March 2020 highs.
Meanwhile, USD/CAD is trading at the upper boundary of the trendline resistance and potential for a bearish move. Moreover, this supports the bias as the stochastic is hovering in the oversold territory. A daily close back below the previous day low would probably intensify near-term selling pressure and propel price back towards the yearly low round figure mark 1.24000.
Alternatively, a break of 12-month trend resistance, signalling a bullish shift in trend. If this occurred, look for price to potentially charge back to challenge the yearly high set in January (1.2881). However, it must be noted that the latter scenario seems relatively unlikely given the multitude of bearish technical signals on display.
