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The re-appearance of risk aversion still seems to be short-term in nature and linked with the upcoming US bank “stress tests”.
Continue to treat back ups in USD/CAD as selling opportunities for a test of 1.1676.

Even Risk
Any and all US data is going to be treated as a potential green shoot, and any
disappointments will be overlooked, as counter to the current trend. That perception will only be changed by a rather violent change in sentiment. The day ahead does not feature much in the way of event risk. Late in the day, BoC Governor Carney and Number 1 sidekick Jenkins speak in Ottawa before the Banking, Trade and Commerce committee of the Senate. The earliest they can start chattering is 4pm ET. Honestly though, what is left for Carney to say.
Unless he puts on a Top and Tails and does the Tango with Jenkins, few will be paying much attention.

Short-Term Outlook: A Modest Backup in USD/CAD
USD/CAD remains entrenched in a short-term downtrend as defined by a descending channel pattern 1.1939 at the top and 1.1631 at the bottom. A secondary downtrend at 1.1789 is resistance well below the top of the descending channel. USD/CAD has remained near the bottom of the channel for many days and after a failure to break lower, a retracement was to be anticipated. Watch support at 1.1726.

Medium-term Valuation Still Limiting Downside
Bearish stance remains valid. However, momentum to drive USD/CAD lower faced a
valuation-based resistance. USD/CAD is at extremes of oversold valuations, highlighting the risk of rallies to create a more opportune condition to head lower. However, USD/CAD still seems poised to eventually test support at 1.1676. Key events to watch in next few days include the US bank stress tests, which might hold USD/CAD in check, and Friday’s employment reports, which are looking like juicy events to spark some active trading.

Key Technical Levels and Moving Averages