• USD/CAD bears are moving in and eye a run to last week's lows.
• The current 15-min chart's M-formation could be key in this regard.

USD/CAD bears are back in the driver's seat as the market is a wash with US dollar longs that are being squeezed despite the red-hot US inflation data on Thursday. A resurgence in the oil price is also benefitting the loonie in late afternoon trade on Wall Street which has flipped risk-on. The following is a top-down analysis that arrives at a bearish thesis for the days ahead while below last week's highs of near 1.3850. 

USD/CAD weekly chart

The price has reached a weekly resistance area and a correction could be on the cards for the meantime before the next move up. 

USDCAD daily chart

The daily chart is also encouraging bears to the table, having spiked and pinned out on the day so far. The bears, however, need to get below the horizontal and trendline support around 1.3680.

USD/CAD H1 chart

The hourly chart shows the price at the upper end of a box. Therefore, the path of least resistance is to the downside at this juncture with the market having peaked out on Thursday's CPI rally. The highs and lows of the significant days are plotted on the chart and the break of Friday 7 low will be a significant development.

USD/CAD M15 chart

The price has carved out a 15-minute M-formation and should the price hold below it on a restest, followed preferably by a bearish engulfment of the current bullish correction, then the bears will be on track for further downside before the week is out.