Where is USDCAD is going?

FX:USDCAD   U.S. Dollar / Canadian Dollar
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Technical analysis is all about being able to measure the Strength in order to predict the direction of the markets. For that we use patterns, volatility , breakouts, zones. On top of that we use our accumulated experience over the years. It is not a perfect science but I would call it rather an art where intuition is involved.

For the USDCAD             we are in a state where the technicals are not that clear. However for this pair there is 2 other important charts we can depend on. One is the Oil             (Brent or US) and the second one is the USD Index. The charts below show the current state of the USD Index and the Brent Oil             . The points are:
1- Oil             shows weakness and there is more likeliness that it will go down rather than up (I can not say how much). There is an obvious Wedge formation and the upper trend channel is reached. On top there is a sign for some sort of breakout.
2- USD Index is highly overbought and bordering a significant Resistance zone . It will require a major event to break out this heavy resistance. Also there is a wedge formation indicating weakness and overbought indicators are out of scale.
Now all this means that there is a high uncertaintiy regarding USDCAD             even though I can see quite a bit of enthusiams among traders to jump long. Again bear in mind that the USD CAD is bordering a heavy Resistance zone and lately there was quite a bit of deviation from initial trend channel on the down side. As I have mentioned before the late bull Trend breakout does not correspond to a elliott wave but rather seems to be an ABC correctional wave, which (if true) would indicate to a downturn to 1.25 levels. Again I am not saying that the prices will go up or down at this point. All I am saying is that there are no definite indications yet which way it will go. Thus I will wait.
Comment: The weakness became reality. The first test point is shown below at 1.28 level. We shall wait and see for a bounce back. If the weakness continues, the drop may go further down.
Comment: Yellen speech with lots of rounded and not so clear words did not move USDCAD up (or down). Recommendation for action: Wait until we see good formations (strong base) at 1.28 level and watch for breakout signals. Currently do not buy or sell.

First Test Point
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