USDCAD has pulled back from its rally to the 1.3785 area to test the Fibonacci retracement levels visible on its daily chart.

This lines up with a former resistance level at the 1.3400 area that might now hold as support.

The 100 SMA is still above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, these moving averages are close to the 61.8% Fib, which might be the line in the sand for the uptrend. 

Stochastic is already indicating oversold conditions and is turning higher, suggesting that buyers could regain control of price action. RSI is pulling up as well so USDCAD might follow suit. 

Economic data from the US came in mostly stronger than expected last week, with only the core durable goods orders figure falling short. This report printed a 0.4% drop versus the projected 0.4% uptick. However, traders appear to have focused on the upside surprise in preliminary Q1 GDP, which was upgraded from 0.7% to 1.2%, outpacing the estimated 0.9% growth figure. 

Meanwhile, the Loonie has gained a lot of support from the OPEC decision to extend its output deal by nine months as expected. This could keep a lid on global supply and allow prices to stay afloat even as demand weakens, something that is positive for the Loonie.

By Kate Curtis from Trader’s Way