USD/CAD could be about to drop hard
Keep a close eye on USD/CAD over the next 24 hours. The price appears to be forming a head-and-shoulders pattern, with the price action from early August representing the left shoulder, the high from August 6 forming the right shoulder, and the 1.3887 level, which capped the price from August 1 to August 5, serving as the head.
The pattern suggests that if the price breaches the low of 1.3787 seen on July 31, we could see a drop to 1.3752, with potential further declines to 1.3706, and possibly down to the pattern's target at 1.3692. If the price breaks below 1.3787, the head-and-shoulders pattern is likely to remain active as long as the price stays below 1.3805.
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The pattern suggests that if the price breaches the low of 1.3787 seen on July 31, we could see a drop to 1.3752, with potential further declines to 1.3706, and possibly down to the pattern's target at 1.3692. If the price breaks below 1.3787, the head-and-shoulders pattern is likely to remain active as long as the price stays below 1.3805.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information
Comment
The 1.3730 level was a good spot to book profits. Disclaimer
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