The 128 target has not been quite reached and we are at risk of a deeper retracement before the assumed bullish movement continues. This may be one to asses next week for bullish setups if price breaks or closes below 1.2665 support today.
To help support the Canadian Dollar, WTI and Brent are advancing form their lows after the bears have shown signs of exhaustion. I suspect that any gain in energy are merely corrective at this stage and we could be looking for further losses next week, which should in turn help support USDCAD.
However the issue with USD strength at the moment is the Dovish statement from FOMC this week, so Dollar inflows are more likely to be triggered due to its safe haven status surrounding Greece.
The movement up to 1.2780 was a 100% Fibonacci Expansion of the 119 lows to 125 highs. It also met the upper trendlines of two bullish channels and has since produced a Shooting Star Reversal, Inside day and Hanging Man, to warn of weakness at these highs.
We can use a break below 1.2665 to confirm a deeper retracement and reassess long potential next week, to trade in line with the dominant trend and within the wider bullish channel. Also note that it would take a particularly bearish move to break below the 1.2535 swing low to annul the bullish bias, but overall, I suspect we could break to new highs next week.
The Daily and H4 moving average could help support, which all point to bullish momentum, so for me it is a question of how deep a retracement we could see before the gains continue.