The USD/CAD turned south yesterday after a report from Bloomberg mentioning that U.S President Trump was looking to reach a deal on NAFTA in two weeks, and he is likely to host cabinet ministers in Washington to try to achieve a breakthrough
The Loonie touched its strongest level since Feb. 28 at C$1.2775 this morning on the back of optimism about the prospect of a NAFTA trade deal. On the 30 mins Chart, the current price patterns suggest for further weakness on the USD/CAD in the short term near 1.2643 followed by 1.2454 ( Wave C of Elliott Wave pattern).
Another technical pattern which is also signalling a potential downturn on the pair is a bearish “Head & Shoulders “pattern, unfolding since early March 2018. The Head and Shoulders pattern is generally regarded as a reversal pattern. Upon a break of the neckline, the price typically fall sharply to a level that is equal to the distance between the Head and the Neckline. The estimated price target based on the H & S pattern is near 1.2512.
On the upside a break above 1.2950 would lead a run to the 1.3000 level followed by the recent high of 1.3125.
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