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USD/CAD Double Top Pattern In Play - Brace for a Breakout on Thursday! 

EagleFX

The USD/CAD was closed at 1.34097 after placing a high of 1.34377 and a low of 1.33152. Overall the movement of the USD/CAD pair remained slight bearish that day. A sharp decline in the USD/CAD pair was seen after the Federal Reserve's monetary policy decision. The pair dropped to its lowest since 2nd March on Wednesday and lost nearly 80 pips.

Fed on Wednesday announced to leave its interest rates at the same level at 0 – 0.25% as widely expected. Fed assured its commitment to using its tools to the fullest in support of the US economy in recent circumstances where achieving maximum employment and price stability is a priority.

Federal Reserve also revised its economic projections for 2020, with GDP falling by 6.5% and unemployment reaching 9.3% at the end of the year. US dollar came under pressure after Fed's decision and dragged the pair USD/CAD to its three months lowest level.

At the data front, US CPI & Core CPI fell to -0.1% from 0.0% expectations and weighed on the US dollar. The Federal Budget Balance also came short of expectations and exerted pressure on the US dollar on Wednesday. On the other hand, adding in the downfall of USD/CAD prices on Wednesday was the increased prices of WTI crude oil, which surged to $39.88 level on the day and supported commodity-linked Loonie.

The Crude Oil, despite the poor than expected US crude inventories, rose on Wednesday and gave strength to the Canadian dollar. The strong Canadian dollar then supported the downward movement of the USD/CAD pair on Wednesday. There was no macroeconomic data from the Canadian side to be released that day so, the pair was moved on the back of the US dollar and crude oil on Wednesday.


Daily Technical Levels

Support Resistance

1.3337 1.3463

1.3262 1.3514

1.3211 1.3589

Pivot Point: 1.3388

The USD/CAD is consolidating in a narrow trading range of 1.3490 - 1.3374 level and violation of these levels will determine the further trend in the USD/CAD pair. On the 4 hour chart, the downward channel is suggesting chances of bearish bias in the market, which is providing resistance at 1.3490, and the support holds around 1.3245. But the next double bottom support level of 1.3375 level needs to be violated before we see further selling in the USD/CAD prices. Let's look for selling trade below 1.3370 level today. Good luck!

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