The USD/CAD pair started slipped lower after hitting the critical resistance level at 1.33201. From that level, the bears took control of this pair but the USD/CAD bulls eventually found support at 1.29509. Though the bulls showed significant strength, the bullish rally was capped by 38.2% Fibonacci retracement level (Drawn from the high of 3rd December 2019 to the low of 31st December 2019). And the formation of the bearish pin bar right at the critical resistance level at 1.30939, strongly suggests the bulls are losing the steam. As long as the price trades below the high of 9th January 2020, the bears are mostly like to dominate.
To continue the current bullish rally we need a daily closing of the price above the critical resistance at 1.30939. Breaking above that level might lead this pair towards the 50% retracement zone. Breaking above the 50% retracement level at 1.31375 might push the price towards the next resistance at 1.31782. 1.31782 might provide significant bearish pressure and rejections 61.8% retracement might result in another sharp drop.
On the downside, price is most likely to head towards the critical support at 1.30065. If the bears manage to break below the support at 1.30065, the price might head towards the low of 31st December 2019, at 1.29509. However, a retest of the major resistance at 1.30929 during the active trading hours might intensify the bearish threat.
As long as the 38.2% bearish retracement level holds, bearish sentiment is most likely to prevail. And any bearish price action signals might bring back the sellers. Considering the broader picture, the overall bias for the USD/CAD pair remains bearish until it breaks the 61.8% Fibonacci retracement level.