FX.co ★ USD/CAD: major Head & Shoulders activated

The USD/CAD pair rebounded and recovered today but the downside pressure remains high. As you already know, the Dollar Index crashed, being in a corrective phase since last Friday, after the US Unemployment Rate came in worse than expected.

Fundamentally, the US Final Wholesale Inventories reported a 0.6% growth versus the 0.8% expected. Still, the greenback remains sluggish ahead of the US inflation data. The CPI and Core CPI data will be released tomorrow and could really shake the markets.

USD/CAD Retests The Sellers!

Technically, USD/CAD dropped below 1.3503 and under the 1.3468 former low activating a major Head & Shoulders pattern. As you already know, this is seen as a downside reversal formation.

Now, it has rebounded and it has retested the broken downside obstacle of 1.3468 before trying to resume its sell-off. The 1.3412 immediate low stands as static support.

USD/CAD Forecast!

A valid breakdown below 1.3412, a new lower low could announce more declines and could represent a new selling opportunity. A larger downside movement could be confirmed only after dropping and closing below the S1 (1.3360).