Moves inside of growth channel has been running since April 2016. USDCAD reached its high on May 5th at 1.3793, and this time it failed to test upper limit of the uptrend channel due to resistance on 1.3750 which triggered faster rebound. The target of current downward movement is the lower limit of growth channel which is located at 1.3220 level. Additionally in the same area we have support so some reflection in this area is almost certain.
The most likely scenario is a dynamic bullish reflection from lower limit of the growth channel and another move towards the upper limit. If bears could break indicated level of 1.3220 then target area would be 1.3000 – 1.2970. In that case it will mean breaking out of the channel and drops may be much deeper.