USD/CAD Price Analysis: Bulls challenge monthly ascending channel resistance, around 1.3200 mark

• USD/CAD gains some follow-through traction and climbs to multi-week tops.
• Falling crude oil prices undermined the loonie and remained supportive.

The USD/CAD pair added to last week's positive move and gained some follow-through traction for the second consecutive session on Monday. The momentum lifted the pair to fresh monthly tops, with bulls now challenging the top end of monthly ascending trend-channel.

A sharp fall in crude oil prices – concerns over the outbreak of the deadly coronavirus – undermined demand for the commodity-linked currency – the loonie. This coupled with the prevailing risk-off mood benefitted the USD's perceived safe-haven status and remained supportive.

Meanwhile, technical indicators on maintained their bullish bias on short-term charts, albeit have moved on the verge of breaking into the overbought territory on hourly charts. This seemed to be the only factor holding traders from placing fresh bullish bets and might cap additional gains.

Having said that, sustained strength above the mentioned barrier might accelerate the momentum further towards the very important 200-day SMA, around the 1.3235 region. The pair then might aim towards testing the next major resistance near the 1.3265-70 supply zone.

On the flip side, immediate support is now pegged near mid-1.3100s (daily lows) and is closely followed by the 1.3125-20 horizontal zone. Failure to defend the mentioned support levels might now drag the pair back below the 1.3100 mark towards the 1.3070-60 resistance breakpoint turned support.

USD/CAD daily chart