The pair extended this week's sharp retracement slide from the 1.2870 region and witnessed some selling during the early part of the trading on Friday. The lack of progress in the Russia-Ukraine peace negotiations pushed crude oil prices to a multi-day high. This, in turn, underpinned the commodity-linked loonie and exerted some downward pressure on the USD/CAD pair.

That said, acceptance below a technically significant moving average, leading to a subsequent break through the monthly low, around the 1.2585 region, will be seen as a fresh trigger for bearish traders. The USD/CAD pair might then accelerate the slide towards mid-1.2500s en-route intermediate support near the 1.2525 zone before dropping to the key 1.2500 psychological mark.

In doing so, the Loonie pair justifies the clear downside break of 50-DMA and 100-DMA, as well as the bearish MACD signals.

However, the 200-DMA and an upward sloping support line from June 2021, respectively around 1.2605 and 1.2585, will challenge the pair’s further downside.

In a case where the USD/CAD bears manage to conquer the 1.2585 support, the pair becomes vulnerable to revisit January’s low of 1.2450.

Alternatively, a convergence of the 50-DMA and 100-DMA, around 1.2685-90, restricts short-term upside moves of the USD/CAD prices.

Following that, the pair buyers will need validation from the 1.2700 threshold ahead of targeting the tops marked during September 2021 and so far in March 2022, around 1.2900.

Overall, USD/CAD is near to the key support levels, a break of which will magnify the bearish bias for the pair.

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