USDCAD looks done with its climb as it finally broke out of the ascending channel on its 4-hour time frame. Price is on its way to test the 200 SMA dynamic inflection point and another break lower could confirm that sellers are in control.

The 100 SMA is still above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. Then again, these moving averages may have yet to catch up to the latest sharp moves.

RSI is heading south to indicate that sellers have the upper hand, but the oscillator is dipping into the oversold region to signal exhaustion. Turning higher could draw buyers back in and lead to a bounce back to the channel bottom.

Similarly stochastic is falling into the oversold region to indicate that sellers need a break and that buyers might take over. This could lead to a quick retest of the broken channel bottom around the 1.3250 area where more sellers might be waiting.

The pickup in risk-taking after positive weekend events was enough to spur a rally in crude oil and commodity currencies. Recall that traders were anxious ahead of the G20 meeting between Trump and Chinese President Xi, fearing that more protectionist trade measures might be doled out. However, both leaders agreed to hold off any more tariffs, which fueled hopes that the trade war might soon come to an end.

Furthermore, indications that the OPEC and Russia could extend the output deal in order to keep prices afloat had its intended effect on the commodity. Analysts predict that the oil producing nations might keep the deal in place throughout the next year, adding more factors that the commodity could recover from its slide.