Strategy
Buy 1.2850 with a stop below 1.2700 for 1.3240. Time duration is 2-3 months.
Technical View
Price has been declining since reaching a high at 1.3078 on 13 June. The decline has come down to the Fibonacci 38% correction point as well as the 20EMA support line. If price is able to hold above this support level, there is a good chance price will try the topside at 1.3078 again. MACD has remained bullish and is hinting at a bullish price trend. 20EMA is also hinting at a bullish price trend. Only Stochastic is hinting at a price decline.
If price is able to hold above this support, we are likely to see another rally to the Fibonacci 127% price projection target at 1.3240 in the next few months ahead. However, a decline below the Fibonacci 62% price correction level is likely to send price lower to the base at 1.2555. We are bullish for 1.3240.

Fundamental View
In the previous week, the U.S. Federal Reserve hiked interest rate by a massive 75 basis points, which was the largest interest rate hike in history. As a result of this hike, interest rate in the U.S at 1.75%, is now higher than in Canada, where interest rate is currently only 1.5%. Interest rate differential is now in the U.S. dollar favour, making the US dollar more attractive than that of Canadian dollar. Going forward, the Federal Reserve is going to be more aggressive in hiking rate than the Bank of Canada. In July, investors are expecting the Federal to hike interest rate by another 75 basis points and 50 basis points thereafter in August 2022. Interest rate differential is going to increase and this is likely to keep U.S. dollar stronger than the Canadian dollar.
Market is worried that the global economy would go into a recession with global central banks except the Bank of Japan, hiking rates. Higher interest rate could drive the global economy into a recession. As market risk increases, investors are also likely to turn to the U.S. dollar for its safe haven status.
Crude oil prices have also been declining on fear of global recession leading to less demand for oil. Despite a ban on Russian crude oil, price has been on a decline in the recent weeks. A decline in crude oil price is likely to weigh on the Canadian dollar.