The loonie has failed twice since June 28 to break 1.2849 support level after Canadian economic data showed that the weak manufacturing sector is hindering economic growth. Presently, the plunge in oil prices has impacted the struggling currency even more, and this is expected to continue as long as the oil glut remains.
Yesterday, USDCAD closed as a bullish pin bar, confirming a possible change in trend. While that is not enough confirmation to buy, the higher-lows that aligned with the upward trend line as shown above further validated the loonie weakness. Although, the US dollar is weighed upon by weak investors demand, after the Fed left rates unchanged last week. Still, I think the US dollar is strong enough to attract volume needed to open up 1.3378 target.
Hence, I am bullish on USDCAD with 1.3378 as the target as long as 1.3033 holds.