Early in the American session, the Canadian dollar (USD/CAD) is trading below the level of 1.2900. It is currently quoting at 1.2881, after having reached the top of the uptrend channel.

The rises in the USD/CAD pair were fueled by the drop in oil prices, and the strength of the US dollar. The barrel of WTI struggles to hold above the psychological level $100.00.

According to the 4-hour chart, we can see that the Canadian dollar is trading with a strong upward bias. However, it is showing signs of exhaustion and it is likely that the pair will make a correction in the coming days towards the zone +1/8 Murray zone around 1.2817.

The Eagle indicator is reaching the 95-point level which represents an extremely overbought zone. If the loonie consolidates below 1.2939 (+2/8 Murray)m there could be a technical correction in the next few days.

Additionally, the zone +2/8 Murray around 1.2939 is also a strongly overbought level. If a pullback to this top occurs in the coming days, we will have an opportunity to sell with targets at 1.2817 and 1.26 63 (200 EMA).

Our trading plan for the next few hours is to sell below 1.2880 (current price) or in case of a pullback at 1.2939, with targets at 1.2825, 1.2695 and the 200 EMA at 1.2663. The eagle indicator supports our bearish strategy.