Potential Double Top Pattern May Drag USDCAD To 1.2120


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.


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 global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

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: US Dollar On the Rise Despite Weak PMI Data Market Analysis: GBP/USD Nosedives While USD/CAD Aims Higher EUR/USD Analysis: Key Support Zone Resists Selling Pressure USD/JPY Analysis: Rate Reaches Maximum of the Year Market Analysis: EUR/USD, GBP/USD, and USD/JPY

Latest articles

Forex Analysis

Market Analysis: US Dollar On the Rise Despite Weak PMI Data

EUR/USDThe euro fell against the US dollar on Friday as economic data showed a contraction in economic activity, which could prompt European Central Bank hawks to soften their policy stance. Preliminary data indicates a contraction in economic activity in

Financial Market News

Economic calendar: NASDAQ 100 May Keep Falling, High Volatility in Oil Markets, Potential Appreciation of the US Dollar

The US, Japan and the UK may have kept interest rates on hold last week, but with the Federal Reserve indicating that rates will stay higher for longer, there is turmoil in the equity markets. The NASDAQ 100 fell 500

Financial Market News

Financial Markets Waking Up after a Turbulent Week: Important News

The main event of last week was information from the Fed. Jerome Powell once again demonstrated his determination to maintain a tough political stance, which caused: → increase in bond yields. Yields on 10-year securities reached their highest since 2009; → the

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.