USDCAD bulls could not hold price above the key level of 1.2730-1.2750 which was our condition for a bigger bounce higher. Price broke below the back test area and is making new lower lows. However the new lower lows in price are not followed by a new lower low in the RSI.

Blue line - bullish divergence

USDCAD recent price action has made us resketch the wedge pattern in order to include more important points and in order to depict the current situation in a clearer way. Trend remains bearish as price continues making lower lows. The RSI still remains above the blue trend line confirming the bullish divergence. Traders need to be very cautious. As long as the RSI is not breaking to new lows the chances for an upward reversal and another break above and out of the downward sloping wedge pattern are high. At current levels we prefer to be neutral if not bullish.