Canadian Dollar futures took a tumble on January 21 as the Bank of Canada cut interest rates by 0.25%. With falling oil prices hampering the economy a rate cut was possible, but most traders were expecting it later rather than sooner.
Canadian Dollar futures (March) fell from 0.8277 before the announcement, to a low of 0.8063 two-and-a-half hours after the announcement
Figure 1. March Canadian Dollar Futures - 1 Minute Chart
On the daily chart, the large drop today has pushed the CAD well below the descending channel it had been trading in. At this point there is little to be bullish about.
For those not already short (or are looking to get back in) it's usually best to wait for some sort of pullback. Once the price moves higher, often there is a pause for two or three days (or more). If the price breaks below the low of those "pause days" that's likely a better place to go short than here (as short-term selling may be exhausted).
Figure 2. Canadian Dollar Futures - Daily Chart
Potential points of resistance on the pullback include the 0.812 to 0.813. This is where the price paused for about an hour before continuing to decline after the BoC cut rates (see figure 1). The next point of resistance to watch is the start of today's decline, near 0.827. By the time the price claws back to that level, a short position there could align with a descending trendline in effect since summer.