USD/CAD Price Analysis: Bulls eye a 38.2% Fibo retracement

• USD/CAD could be due for an upside correction within a strong monthly downtrend.
• The daily chart offers an alignment of structure and the 38.2% Fibonacci retracement level. 

From a positioning perspective, the CAD is a little rich at this juncture and the US dollar is picking up the bid from both a spot and futures onlook.

CAD net long positions dropped back having jumped higher this previous week while net USD short positions shrunk for a third consecutive week.

This aligns with an overstretched spot market to the downside and the following illustrates where the next bullish move could arise from a break of lower time frame resistance. 

USD/CAD daily chart

The daily chart shows an overextended move to the downside and a correction could be on the cards. 

Bulls can target the prior lows that meet a 38.2% Fibo.

30-min chart

As for the lower time frames, they are highly bearish still.

However, a break of immediate resistance will throw the 8 through the 21 moving average in a bullish crossover and take Momentum into positive territory.

At such a point, bulls will seek to engage and target the 38.2% Fibo of the daily bearish impulse.