US Dollar versus Canadian Dollar has respected the head and shoulder pattern on the daily time frame with its shoulders at 1.28535 and neckline at 1.2641, where we also have presence of our 38.2% fibo retracement level.

 Loonie has successfully provided a bearish break out below the neckline and is expected to retest the 1.2641 price action before proceeding any lower. In worst case scenario, USDCAD can take a bullish correction towards 61.8% fibo retracement level at 1.2764, but our bearish expectations wont alter unless we witness the pair breaking above the shoulder levels 1.28535. This hawkish break would invalidate the head and shoulder structure. Until we have the pair below 50% and 61.8% fibo retracement zones, a bearish corrective structure should confirm selling entries with stop loss at 1.2780 and targeted destination 1.2332. 

BULLISH & BEARISH ENTRIES / TARGET DESTINATIONS : (FOR INTERDAY TRADERS)

Per the USD/CAD daily chart, the pair is “still” upward biased. However, on Thursday, the USD/CAD dopped beneath the 200-daily moving average (DMA), which sits at 1.2501, reaching a daily low at 1.2453. Nevertheless, USD/CAD buyers entered the market, capped the fall, and reclaimed the 200-DMA, leaving the trend intact.

The USD/CAD first ceiling level would be the January 12 daily high at 1.2580. A breach of the latter would expose the 1.2600 figure, followed by the 100-DMA at 1.2523.

Contrary, on the downside, the pair’s first support would be the 200-DMA. A daily close under it could send the pair tumbling to November 10, 2021, cycle low at 1.2386, but it would need to sort a few hurdles on the way down. The second support would be the January 13 daily low at 1.2453, followed by 1.2400 and the previously mentioned November’s pivot low.

Loonie Will Respect the H&S Pattern

Jan 15 2022