USD/CAD is expected to trade with a bearish bias. After yesterday's sharp decline, the pair has clearly reversed down, and is likely to post a new drop towards 158.70. The relative strength index is badly directed. Even though it is now within its "oversold" area below 30, it hasn't yet showed any reversal signals. The 20-period and 50-period turned down as well, which should confirm a negative outlook. To sum up, as long as 161.05 is not surpassed, look for further downsides to 158.70 and 157.50 in extension.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 158.70. A break of this target will move the pair further downwards to 157.50. The pivot point stands at 161.05. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 161.85 and the second target at 162.85.
Resistance levels: 161.85, 162.85, 163.40
Support levels: 158.70, 157.50, 156.90