With the pair maintaining its downside pressure, further decline is likely. This leaves the pair targeting further downside towards the 1.0900 level, its psycho level where a violation will aim at the 1.0842 level, its previous week low.
A follow-through lower if seen will open the door for a run at the 1.0736 level, its Dec 20 2013 high. A reversal of roles as support is likely to occur here and turn the pair higher from this level.
However, if this fails to happen expect more weakness towards the 1.0650 level. Its daily RSI is bearish and pointing lower supporting this view.
Conversely, resistance comes in at the 1.1000 level where a violation will set the stage for a run at the 1.1089 level. A breach will pave the way for a push towards the 1.1172 level, its big psycho level.
It may face bear threats at this level but if broken, further upside could occur towards the 1.1200 level. All in all, USDCAD continues to face further bearishness on correction.
Guest post by FX Tech Strategy
See more in the Canadian dollar outlook
