Things are heating up for the USD/CAD trade, and the Bears have started the plunge. Fundamentally there is still strong pessimism over the NAFTA outlook and how things will pan out. Dollar Bulls seem to be gaining strength over all, but not so much for the USD/CAD market. The recent slide in Crude Oil may be one of the strongest fundamental pressures on this market currently. Coupling these two variables leaves little for Bullish traders to grasp hold of. Until there is more certainty as to how trade shall move forward, and if the Crude market stays soft, then the Bears are most likely to remain dominant for this market.
Currently this currency is falling under the pressure of steep sloping Resistance. The trend is your friend, and at the moment the market is targeting the 1.2686 Support level. Expect a fight for a bounce by the Bulls at this level. Selling pressure has a good chance of losing out in this area. Most likely there will be some consolidation around this area, but a strong turn of events by the Bulls is not on the menu. Under 1.2686 all bets are off for a bounce. A failure here would be a very negative indication that Bearish momentum is gaining strength. 1.2583 and 1.2435 are the next downside targets.
Only a sustained trade above 1.2790 takes us off of the Bearish outlook as the Bulls fight to stop the slide. Fundamentally and technically it will be hard to get motivated for an upside move. A breach of 1.2919 is necessary to get off of the Bearish bandwagon. Do not fight a rally above this level. Trading above 1.2919 may reverses gears in a big way for the Bulls as momentum shifts. 1.3028 is the next upside level to aim for. Fundamentals will be the key for the trading bias if the USD/CAD returns to these higher levels. If the Crude Oil market is edging higher, and NAFTA trade talks ease tensions, then expect fresh buying strength to flood into this currency. 1.3174 is the longer term upside objective if the Bulls return in full strength.