(Feb 1 Wednesday) The USDCAD daily chart shows a double-top formation at the 1.3600 peak, The first test of 1.3588 (Nov 13) and the second test of 1.3600 (Dec 27). Each attempt was met with selling of US dollars on profit-taking, but rather more of Canadian dollar buying interest and the pullback falls back to the 1.3000 region.
The peak of 1.3600 and low of 1.3000 shows a wide 600 point trading swing post year-end covering of short Canadian dollar positions and the buying of Canadian dollar trend continued as January came in.
Yesterday the intraday chart shows the USDCAD rate declining from 1.3125 to dip to the 1.2965 support. If this level is broken, the near-term support of 1.2850 (Sept 6) may perhaps be tested once again, if the path of the US dollar should continue to weaken.
The 14 day moving average (green line) also shows a semi-double top formation on 1.3472 and 1.3450, typically a bearish indication and indeed has fallen to the current level of 1.3150. The 30 DMA on the other hand, also shows a declining pattern from 1.3417 to 1.3275.
The 14 day relative strength index chart has already shown toppish or overbought levels at 67-66 and has tried the 32 level, very close to the 30 textbook oversold level. (possible spot equivalent of 1.2900 - 1.2850 levels).
The elliot wave chart shows a negative trend to the -0.0195 level from +0.0144 looking heavy, but both the RSI 30 overbought and the -0.0195 elliot levels are cautionary levels or reversal rebounds.