USD/CAD has been in a downward trend for a while coinciding with the oil market recovery. Today has been mixed for the pair as strong US data pushed the greenback higher.
The pair is pretty much downward and flat for the session as oil pushed higher once again counteracting the USD strength. Also the RBC Canadian manufacturing PMI number beat expectations adding some weight to the positive CAD story.
The key feature on the chart is the wedge formation below. The price has now broken and retested the pattern and if the technical play out we could see a further extension of the move downward.
The target on the downside for the bears could be the wave low at 1.3315 although it is some way away from the current level.
Looking at the indicators they are both still bearish; the Relative Strength Index hit the oversold zone and now moved higher.
There is space for another move lower but we would need another round of selling momentum. The MACD signal lines are under the zero line and the histogram is already in the red.
The only issue is the histogram bars diminishing in size, if the move lower is to transpire maybe some more momentum is needed.