Check out this double top pattern on the 4-hour chart of USD/CAD!
Is the pair breaking below the neckline already or are we about to see another bounce from here?
Here are the inflection points to watch:
USD/CAD: 4-hour
USD/CAD 4-hour Forex Chart by TradingView
Dollar weakness on dovish Fed expectations and speculations of Kevin Hassett’s appointment as next Fed Chair have kept USD/CAD below the key 1.4100 barrier in the past month.
At the same time, an upside surprise in Canada’s Q3 GDP report led to a sharp rally for the Loonie, as the strong growth figures dampened BOC easing bets.
Can USD/CAD gain traction on a potential downtrend?
The pair is already hovering slightly below the double top neckline around the pivot point (1.4010) and major psychological 1.4000 mark, suggesting that a selloff that’s the same height as the formation could follow.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the U.S. dollar and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
This could take USD/CAD to the next bearish target at S1 (1.3900) which also aligns with a major psychological mark then down to S2 (1.3830). Note that price has also broken below the dynamic inflection points at the moving averages, and that the narrowing gap between the indicators appears to be hinting at a downward crossover.
Just be sure to keep your eyes peeled for reversal candlesticks at current levels, as a strong bounce could take the pair back up to the latest highs and beyond!
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.