Potential Double Top Pattern May Drag USDCAD To 1.2120

FXOpen

The US Dollar (USD) extended downside movement against the Canadian Dollar (CAD) on Friday, decreasing the price of USDCAD to less than even 1.3090 ahead of some key economic events. The technical bias remains bullish because of a Higher High and Higher Low in the recent wave on daily chart. A potential double top pattern on daily chart might drag the pair towards the 1.2120 support area.

Technical Analysis

As of this writing, the pair is being traded around 1.3077. A hurdle may be noted near 1.3100, the psychological number ahead of 13212, the swing high of the last major upside rally as demonstrated in the following daily chart. A break and daily closing above the 1.3200-1.3212 resistance area could incite renewed buying interest, validating a move towards the 1.3500 resistance zone.

usdcadm-d1-exness-ltd[1]

On the downside, the pair is likely to find a support around 1.2954-1.30000 support area which is the confluence of psychological number and 23.6% fib level and then 1.2666, the 50% fib level. The technical bias will remain bullish as long as the 1.2859 support area is intact. Not to mention, a potential double pattern is being emerged on the daily chart which is yet to be confirmed through a breakout of neckline.

Canada Inflation

The Bank of Canada (BoC) is due to release the Canada’s Consumer Price Index (CPI) report today during the early New York session. The report is considered a key gauge for inflation. According to the average forecast of different economist, the rate of inflation in Canada remained 1.4% in July as compared to 1% in the month before. Generally speaking, higher inflation is considered positive for the developed economies like Canada.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair could be a good strategy if the price breaks the neckline of double top pattern on daily chart. The neckline is sitting in around 1.2950 support area.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: AUD/USD and NZD/USD Sight Steady Increase European Currencies Adjust to Support Levels: Is Growth Possible? NZD/USD Exchange Rate Falls from Nearly 5-Month High Market Analysis: GBP/USD and EUR/GBP Poised For More Losses Dollar Falls After Inflation Data: Is a Change in Medium-Term Trends on the Horizon?

Latest articles

Commodities

Brent Crude Oil Price Hits Highest Since 1 May

As the chart shows, yesterday the price of Brent crude oil rose to $84.40, which is the highest level since 1 May 2024.

The demand for Brent crude oil was driven by the following factors:

1. The holiday season

Shares

Nvidia Becomes World's Most Valuable Company

According to the NVDA chart today, the share price rose yesterday to a new all-time high, surpassing $135 (after a 10-to-1 split). This pushed Nvidia's market capitalisation to $3.34 trillion, overtaking Microsoft, which is currently valued at $3.32

Forex Analysis

Market Analysis: AUD/USD and NZD/USD Sight Steady Increase

AUD/USD is attempting a recovery wave from 0.6590. NZD/USD could gain bullish momentum if there is a clear move above the 0.6150 resistance.

Important Takeaways for AUD/USD and NZD/USD Analysis Today

· The Aussie Dollar

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.