The USD/CAD pair continued to lose ground during the middle of the European session on Wednesday and fell to a low of more than a week in the last hour. Persistent weakness below the simple 200-hour moving average was seen as an important trigger for bearish operators and fueled the continuing corrective decline in the four-month highs earlier this week.
The pair is currently trading near the support characterized by a Fibonacci level of 23.6% of the upward movement of 1.3036-1.3330, which, if broken, can cause some new sales. The pair could become vulnerable to further accelerating the fall to the 38.2% level of Fibo, around the 1.3220 region, en route to the 1.3200 round.
In the meantime, the technical indicators in the 1-hour graph are already fluctuating somewhat in over-sold conditions. This, along with the fact that the oscillators in the daily chart have managed to maintain their bullish bias, justifies even more caution before positioning for a short-term depreciation move for the pair.
Therefore, any subsequent weakness seems likely to attract more purchases in a fall near the very important 200-day SMA. This coincides with 38.2% of Fibo. level that should help to limit deeper losses, at least for the time being.