Is that a double top pattern I’m seeing on USD/CAD?
Better keep your eyes on this neckline support to gauge if a selloff is due soon!
USD/CAD 1-hour Forex Chart by TradingView
Check out this pair’s failed attempts to bust through the 1.3550 minor psychological barrier!
Even though the BOC decision spurred a Loonie selloff last week, the oil-related currency seems to be drawing some strength from the commodity these days.
After all, persistent supply concerns stemming from geopolitical tensions continue to boost crude oil in the markets. To add to that, China’s recent stimulus efforts are lifting demand expectations in the near-term.
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 Canadian and the U.S. dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
With that, USD/CAD might have enough energy to bust through the double top neckline support near S1 (1.3390) and the 1.3400 major psychological mark.
If that happens, watch out for a bearish move that lasts by the same height as the chart pattern. Support at S2 (1.3340) and S3 (1.3270) might spur bounces, too.
On the other hand, a bounce off current levels could take USD/CAD back up to the tops near R1 (1.3510) or even on an extended rally to R2 (1.3590) near another psychological mark.
If you’re looking for a source of news volatility, make sure you check out the top-tier catalysts for the week ahead.
Whichever direction you end up trading, make sure to follow your own trading plan when you take your setups!