The USDCAD has started to year on the wrong foot with a very strong sell-off. Usually, we can expect bearish weekly candles to be followed by new bearish candles especially when we have sustained momentum behind the move. In this regard we can expect USDCAD to make another attempt to break to the downside but we should find some sort of support at 1.3140. Only a break below December low 1.3080 but more importantly below 1.3000 big psychological number can be a sign of a larger bearish trend development.
The stochastic indicator is definitely building bearish momentum thus any rally should be limited both in time and price and we should expect 1.3300 to hold any attempt of an upside breakout.
In terms of risk events for the Canadian Dollar we only have the quarterly BOC Business Outlook Survey scheduled to be released on Monday which has a predictive quality in regard to timing interest rate decisions.
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