Bullish breakout on the USD/CAD. The drop in oil has pressured the Canadian Dollar to the downside and that is why we see the USDCAD heading higher, even though the greenback has also rallied on its own merits. Yesterday we saw that the daily lows of the USDCAD were higher than the previous ones and that was a sign that the bullish pressure was accumulating around the 1.3445 level. Today the price breaks above the 1.3445 level and reaches the 1.3500 zone which could act as resistance. Above the 1.3500 level, its next resistance could be the 1.3800 level. To the downside, in case of a pullback, the most important support is at the 55 day EMA around the 1.3231 level.
I think that crude oil has hit a support zone at 42.36 and should begin a consolidation for a couple of months before beginning the next trend. So the USD/CAD should also stay in a range bound between 1.3600 up to 1.3683.
The drop continues on the USDCAD and its bearish momentum accelerates below the 55 day EMA at the 1.3363 level. The pair may drop to the 200 day EMA at the 1.3148 level, which could act as support. To the upside, the same 55 day EMA may act as resistance.