The USDCAD pair has been rising slowly over the last few days but stopped at September highs near 1.3250 and since then, bears have taken control and the Loonie has been strengthening, although not sharply. On Friday, the USDCAD pair was trading 0.20 percent lower, seen at around 1.3150 during the London session.
The pair also fell below previous highs at 1.3160 and more importantly, it is now dropping below the medium-term bullish trend line, which could lead to a trend reversal over the next few days. If the pair closes below this trend line, bears could be further stronger, with the next target at 1.3120 and the following target could be near 1.3050.
On the upside, bulls need to defend the mentioned support of 1.3160 and after that another bearish zone could be located at 1.3250 and, possibly at previous highs near 1.3250.
The RSI indicator is slowly reaching the oversold territory, meaning a small bounce could occur. As long as oil remains below 60 USD, the Canadian Dollar may not significantly strengthen.
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