USD/CAD Price Analysis: Renews monthly low, further downside appears limited around 1.2680

• USD/CAD takes offers to refresh monthly low, down for fourth consecutive day.
• Six-week-old horizontal support, oversold RSI conditions test sellers.
• Bulls need validation from 200-SMA for fresh entry.

USD/CAD stands on the slippery ground as it renews a one-month low near the 1.2700 heading into Monday’s European session.

In doing so, the Loonie pair drops for the fourth consecutive day while extending the previous week’s downside break of the 200-SMA.

However, a horizontal area comprising levels marked since mid-April could join the oversold RSI conditions to challenge USD/CAD bears around 1.2680.

Following that, a two-month-old upward sloping support line near 1.2585 will challenge the pair sellers.

Alternatively, corrective pullback needs to cross the 200-SMA level near 1.2800 to recall the buyers.

Even so, May 11 swing low around 1.2920 may challenge the USD/CAD upside before the monthly high of 1.3076.

USD/CAD: Four-hour chart

Trend: Limited downside expected