On the heels of the US dollar strength that was witnessed last week, the USDCAD currency pair vaulted straight through the parity level.  Against the US dollar, the Canadian dollar is now trading at 1.0335, about 5% lower than the 0.9800 exchange rate the market saw just two weeks ago.  Now, the currency pair seems to be taking a breather – consolidating just above the 1.0300 support level in the 15-minute time frame.

Currently trading at 1.0332, USDCAD is coming up on major resistance at 1.0350.  Should the currency pair break through the level, the next target for the market will be the 1.0400 easy.

But, indications are for the currency pair to turn lower in the short-term.  This is particularly evident in the Stochastic oscillator, which has already entered overbought conditions and turned at a reading of 70.25.  The reading would coincide with a bearish divergence in the MACD oscillator and a triple top formation currently in the works for the price action – both technical indications of a move lower.

USDCAD 15-minute shot – Source:  FX Trek Intellicharts

If sellers win out at this point, traders will be anticipating a decline to 1.0300 in the near term.  A failure to gain support at this level would point targets lower for an imminent retest of the 1.0262 September 26th overnight low.

This would all be ahead of the expectedly disappointing US Conference Board consumer numbers tomorrow morning.  Market estimates are for a rather pessimistic report, showing US consumers remain concerned over the state of the economy.  Not a good selling point for the greenback.