USD/CAD has been rallying since the 2016 low made in May, at 1.2460. It almost reached 1.36 in November before topping and than retreating. The bearish correction has been consistent in December, but price might be coming down to a critical support around 1.31. USD/CAD Daily Chart 12/9(click to enlarge)Bearish Correction vs. Rising Trendline:- As price approaches 1.31, it will be looking at a rising trendline that is coming up from the 1.2460 low in May. - Also note that around 1.3075, there is the 200-day simple moving average (SMA). If this SMA holds as support, then, we would see a "bullish slingshot" signal. - If the rising trendline and SMA holds, we should look for upside first back towards 1.34, and then onto 1.36. The 1.3635-1.3650 area is a key support area that could have turned into resistance. We should limit any bullish expectation to this area for now. Bearish Scenario:- If the bearish correction continues and pushes USD/CAD below 1.3075, I would first give it some elbow space and see what happens around 1.30. - A break below 1.30 however would convince me that USD/CAD has turned bearish. - In this bearish scenario, we should expect resistance around 1.3250 and downside risk towards the 1.2460 low.