The only currency to outperform the U.S. dollar over the past day and the past month has been its neighbour — Canada’s loonie.

The Canadian dollar has been the runaway best performer in the forex market recently has interest rate hikes from the Bank of Canada are priced in and oil regains its footing.

Last week, we talked about how the Canadian dollar was in danger of breaking its recently range to the upside. Instead, in a classic techncial move, it tested the top of the range and rejected it. Instead, it now looks to take out the bottom of the range.

The range we are talking about is 1.0406 to 1.0748 in USD/CAD. On this chart, we can see that it has been in force since the start of November.

We can see that the range has been tested at least twice on the bottom and twice to including last week when it was emphatically rejected.

At the moment, we think it’s highly likely that the bottom of this range will be tested. The momentum is clearly on the Canadian dollar’s side. Wednesday saw the release of Canadian GDP data that was disappointing yet the Canadian dollar still made gains — that’s the sign of a strong trend.

If we look at the clear rejection of 1.0750 as a double top, then the measured target is a move down to 1.0070. Of course we will need to see a break of the December low for that to happen.