Golden cross clashes with key reversalU.S. Dollar / Canadian DollarFOREXCOM:USDCADFOREXcomUSD/CAD has been one of the strongest trending major FX pairs over the past couple of months. However, despite seeing a golden cross delivered earlier today, rather than extending higher, the key reversal candle from Thursday warns that the bullish trend may be running out of steam. Momentum indicators reinforce that message. RSI (14) has broken the uptrend it had been tracking, and remains in overbought territory. MACD is still above its signal line, but the two continue to converge, raising the prospect of a bearish crossover in the sessions ahead. Then there's the stretch indicator I watch closely. At 6.55 times the 14-day ATR above the 50-day moving average, it's the most extreme reading since the early stages of the pandemic in March 2020, just before we saw a mammoth unwind in the pair. Clearly, that was a unique period, but it's noteworthy nonetheless. The pair has put on an extraordinary move over a very short period of time. The focus now is on whether today's price action delivers follow-through selling, which we've seen a little bit of in Asia. However, given weak turnover in this time zone, this one remains on the watchlist until volumes pick up later in the session. The first downside level I'm watching is 1.4180. The pair was capped beneath that level earlier this month before eventually breaking through. It's since come back to test it and, for now, remains above. If the pair were to break and hold beneath it, shorts could be considered with a tight stop above, targeting an extension of the bearish move. On the downside, the November 2025 swing high of 1.4140 is the first level of note. If that gives way, there's not a lot of visible support until 1.4024, the breakout level from June 11. That stands out as a logical initial downside target if the current pullback extends, with 1.3967 another option after that. Beyond that, it would likely require either a significant deterioration in the US economic outlook that calls into question the need for renewed Fed tightening, or a meaningful improvement in Canada's fundamental outlook, to justify a deeper pullback. There's little on Friday's calendar that screens as capable of delivering that. Good luck! DS