USDCAD – limited correction expected ahead of fresh weakness

The greenback bounced on Monday after suffering strong losses on Thu/Fri, with strong bearish acceleration after disappointing US and upbeat Canadian jobs data last Friday.
The pair also closed higher on Friday on subsequent bounce from fresh multi-month low at 1.2355.
Oversold conditions on daily chart also suggest correction, with the US dollar being supported by expectations for rate hikes in 2018 after disappointing US jobs data showed minimum impact on the sentiment.
On the other side, the loonie remains inflated by higher metals and energy prices, suggesting limited correction before broader USDCAD bears continue, as three consecutive long bearish weekly candles continue to weigh.
Today’s recovery was capped at 1.2438 (session high) which marks initial resistance, followed by 1.2488 (broken 50% retracement of 1.2061/1.2916 ascend) and Friday’s high at 1.2513.
Daily Ichimoku cloud base (1.2555) reinforced by falling 10SMA is expected to cap stronger upticks.
Bears look for eventual close below 1.2387 (cracked Fibo 61.8% of 1.2061/1.2916) to generate bearish signal for extension of the downtrend from lower platform at 1.2915 zone.

Res: 1.2438; 1.2488; 1.2513; 1.2555
Sup: 1.2378; 1.2355; 1.2300; 1.2263