USD/CAD has been a tough handle as of late with see-saw price action since the beginning of the month. First, there was the big drop from resistance which hinted at more weakness to follow, but this was not to be the case as the down-move has been quickly reversed the past week. The rapid rise has brought significant resistance back into play, with the area around 12807/54 a difficult spot for USD/CAD. We can see high or closing prints gathered in this zone back to July. Chasing this up-move here, even if we see a breakout, appears risky.

Preferably we first see sideways price action develop around resistance prior to a breakout. It would mark a change in character from other times this zone has been met. Previously, there was a sharp turn lower within a couple of days of meeting resistance. If this time around we were to see price hold, then a base could develop that will lead to a sustained breakout and a formation from which to assess risk on new long entries. 

Even if the ideal scenario plays out, we get a base from which an entry can be taken, the trade higher may be short-lived before another major level of resistance causes problems. The 12950 level is a big one. It dates to prior to the onset of the pandemic, with its most recent validation coming in August. For those looking for a quick-hitter off a level, a near-term short could develop on another failure from around 12807/54. But given the recent higher-low the trade may not develop very far. Overall, in this corner, the tactical outlook is neutral until further price action can provide clarity.