The pair is keeping slightly higher on the day as the dollar holds decent gains against commodity currencies, keeping with a bounce from yesterday in USD/CAD.
Of note, we are seeing price push back above 1.2600 for the first time in a week as buyers look to try and exert more upside momentum this week.
The recent volatility in oil prices have kept things a little messy for the loonie, with WTI falling back under $60 despite finding some stability in the past two days.
The push back above 1.2600 in USD/CAD now sees buyers take aim at the late March highs at 1.2629-47 and that is the next resistance region to be mindful of.
Further resistance is then seen closer to the 100-day moving average (red line) @ 1.2723 before moving on to the 26 February and 5 March highs @ 1.2737-48.
As for downside levels to watch, sellers need to try and work their way back towards testing the key hourly moving averages @ 1.2558-77.
That will be key in trying to exert more downside pressure towards testing the 1.2500 level and the 61.8 retracement level @ 1.2511.
I would still argue that the loonie has strong upside potential and that the latest move this week is more of a pullback rather than a break in the trend.
However, it would be much more attractive to chase dips in the currency against the likes of the yen and franc - especially if there is any further pullback.
Looking at CAD/JPY:
Price has broken below its 50.0 retracement level @ 87.19 with the latest pullback now seeing sellers seize near-term control.
That may yet extend towards the late March lows just above 86.00 and that could be a good dip buying opportunity - subject to oil market and Treasury market conditions.