USDCAD Testing Channel Low

The sell off in USDCAD over the last week has seen price breaking below key support at the 1.2643 level trading down as far as a test of the 1.2469 level, with the bull channel low sitting just beneath. While price is holding the initial test of this support zone, sentiment remains heavy and the market is vulnerable to further downside. With this in mind, bears can look for a break of the 1.2469 level, targeting a continuation lower towards 1.2368 and 1.2243 thereafter. The retail market is currently around 80% long the pair, suggesting plenty of room for a deeper push lower.

Keep An Eye On

Little in the way of key US data this week though we do have CAD CPI due on Wednesday. Any upside in this data will no doubt prove helpful for USDCAD bears. Additionally, keep an eye on oil prices this week. Crude is back up near 2021 highs and a break higher here would be firmly bullish for CAD, sending USDCAD lower over the near-term.