The bears have been on a tear this month and I expect that to continue, albeit temporarily. DO NOT lose sight of the bigger picture, this pair is still clearly on a monthly/weekly uptrend.
Following three continuous weeks of rejection @ the 1.3350 zone (lower red), the highest probability move from the current price level is down. Once (if) price reaches the 1.228 (green), I expect a strong move up. However, if this level is clearly broken AND smashes through previous resistance levels (purple lines), this could signal a major trend reversal and monster move down.
Keep in mind this a weekly chart ( I know, zzzzz) and may take 1-2 years to manifest.
We have a busy week ahead for the USD on the fundamental front which leads me to an alternative third scenario - a sharp move up from current price levels on better than expected USD news. Although unlikely, it is still a real possibility. Powell's speech will be key here, as I believe dovish sentiment is already priced in.
The Loonie has an uneventful week on the news front but a monthly GDP report on Thursday can provide some and insight.
One more thing, much has been made about oil's negative correlation with this pair. Now, I heed caution at putting too much weight on correlation but since September, the two pairs have been closely correlated negatively. WTI is on the cusp of breaking a major level with huge potential upside.
In summary, the most likely move is down from current price levels. Therefore, I am short-term. When and if price approaches the green , I expect a sizable move up in accordance with the longer term trend. If price breaches the green with conviction, be on the lookout for more downward pressure.