USDCAD bullish – Potentially forms a bullish flag for higher

USDCAD has been consolidating under the 1.3214 multi-year high (August 5, 2015) for 8 days. If the rebound off the 1.2950 low breaks above 1.3157 (near the flag upper bounds as shown on the daily chart), that would confirm a bullish flag breakout, extending the current 3-month upswing towards 1.3310 and then 1.3383. Above there would open the 1.3497 retracement (61.8% of the 1.6184/0.9059, 2001/2007 fall). However, a downside move below 1.2950 would negate the bullish scenario and caution for further easing towards 1.2862 (38.2% of the 1.2127/.3214 rise) and 1.2656 (50% of the 1.2127/.3214 rise) in the vicinity of the 3-month rising trendline (from May 14, 2015 low).