USD/CAD Technical Analysis: Plummets to fresh 1-month lows, seems vulnerable

• USD/CAD remains heavily offered for the third consecutive session on Thursday.
• The set-up favours bearish traders, albeit oversold conditions warrant some caution.

The USD/CAD pair extended this week's rejection slide from a resistance marked by six-month-old descending trend-line. The pair remained under some heavy selling pressure for the third consecutive session on Thursday and dropped to one-month lows, around the 1.3165 region in the last hour.

Given the pair inability so sustain above the very important 200-day SMA and repeated failures near the trend-line resistance, the technical set-up favoured bearish traders. The BoC's surprisingly positive tone in the rate statement turned out to be a key trigger for bearish traders.

Sustained weakness below the 1.3200 round-figure mark further fueled the pair's ongoing downward trajectory. Adding to this, a subsequent break through 50% Fibonacci level of the 1.3042-1.3329 recent positive move now seems to have paved the way for an extension of the depreciating move.

Meanwhile, technical indicators on the daily chart have been drifting lower in the negative territory and reinforce the near-term bearish outlook. However, oscillators on hourly charts are already flashing highly oversold conditions and warrant some caution before placing any aggressive bets.

Hence, it will be prudent to wait for some near-term consolidation or a possible bounce. However, any attempted recovery back towards the 50% Fibo. level, around the 1.3180-85 region, might still be seen as a selling opportunity for an eventual test of early-November swing lows support near the 1.3115 region.

USD/CAD daily chart