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After making a significant low in March 2020, the Canadian dollar rallied into mid-2021. Since then, it has retraced much of those gains and now is trading in a sideways channel.

In fact, the Canadian dollar retraced a Fibonacci 78.6% of its 2020-2021 gains. This level forms the lower bound of the trading channel.

In August 2022, the Canadian Dollar started on a swift trajectory lower. The recent recovery amounts to a Fibonacci 48.6% retrace of this steep drawdown. This 48.6% level forms the upper boundary of the channel.

A pullback towards the lower part of the channel will set up the opportunity to sell some Put Options. A rise through the top of the channel will provide the opportunity to take a long position.