USDCAD failed to close below the 55 – day moving average so this is a bullish sign. There is scope to retest the upper range and a break of the 1.2834 high would confirm the underlying long term bullish trend and open the path towards 1.3063 (March 2009 high).
To the downside, the 55-day moving average is expected to provide support but a break below it would see the market move back to test the lower range. A decisive break of 1.2350 would be a concerning development as it would then indicate a much more aggressive pullback and we could see a trend reversal. For the moment this is not the case, as the RSI is above 50 in bullish territory and the 55-day moving average is rising.