Canadian dollar being trapped within the bearish pennant is signalling towards weak momentum by the U.S dollar to reverse the Canadian gains but the pair reversed from 1.24680 on 21st June showing more room for selling pressure in the zone. USDCAD did take a flight of reversal from its lowest lows - finally taking an exit from its complex corrective structure but could be seen struggling with its daily highs being unable to be broken.

The pair could be observed with a pull back from 50% and 61.8 Fibb retracement levels, creating a dovish position for another bearish wave to be noticed. On a short note, i am expecting USDCAD to hit 1.2260 before gaining bullish strength. Take an exit from your trades near EMA50 and wait for a reversal until we get a further dovish impulse to ride the bearish rally. 

USDJPY along with the American economic indicators are denoting a strong sell off to be expected - which will eventually strengthen USDCAD and provide us with a bearish rally to the pair and accomodating our selling entry points in accordance to the wave structure. 

No major economic data from Canada this week, which keeps it dependent upon the NFP figures to be released tomorrow and dollar movement which will provide a further clear view of the formation of structure. 

On the safer side if we get to witness a breakout above 1.24500 with a strong bullish confirmation, as an a prominent exit from the pennant, would drive the pair towards 1.26500 and 1.28230 i.e its highs from April and Feburary which will act as rebound range with strong resistance. 

USDCAD Daily Time Frame Converging Pennant

Jul 01 2021