The pair threatened to break its 200-day moving average (blue line) in trading yesterday, only to settle just above it into the close after equities slumped - resulting in a less friendly mood for risk trades.

Oil also fell as a result and that saw the loonie reverse gains from 1.2453 to back above 1.2500. But so far today, the dollar is looking a little sluggish again and with oil prices bouncing back, USD/CAD is trading down again.

The daily close is once again the key thing to watch, to see if sellers can hold a break below its 200-day moving average @ 1.2498.

If so, that entails a more bearish bias for the pair as we approach trading next week.

The next key targets thereafter will be the 1.2400 level followed by a potential drive towards the October lows near 1.2300.

In any case, the risk mood will be a key factor to consider before the weekend comes along. For now, things are calm but remember we also still have US retail sales to navigate through later today. And Adam pointed out as to why the report could be a sign of trouble, so best be wary of that.