USD/CAD Price Analysis: Backs down to 50-day SMA after Triangle breakout

USD/CAD has continued pulling back after decisively breaking out of a Symmetrical Triangle (ST) pattern on the daily chart. The drip decline since the bullish upthrust on June 7 has taken price back down to the level of the 50-day Simple Moving Average (SMA) at 1.3696, and the upper trendline of the ST. 

USD/CAD Daily Chart

USD/CAD will probably find support at the 50-day SMA and upper borderline and, if so, it is possible this could mark the beginning of a recovery. 

The original breakout of the Symmetrical Triangle on June 7, activated some bullish upside targets for the pattern. The conservative target lies at roughly 1.3881, which is the 0.618 Fibonacci extrapolation of the height of the ST at its widest from the breakout point higher. 

A more bullish target lies at 1.3978, the 100% extrapolation of the height of the ST northwards. 

Although price action has been bearish since the June 7 breakout, with seven out of the last eight days closing lower, the odds continue to favor a resumption of the initial move higher. A break above 1.3791 (June 11 high) would provide bullish confirmation. 

However, a break below 1.3663 (June 7 low) would bring into doubt the uptrending bias. 

Furthemore, a break below the lower trendline of the ST at roughly 1.3640 would suggest a reversal lower, with such a move expected to reach a target at roughly 1.3518, the Fibonacci 0.618 ratio of the height of the Symmetrical Triangle pattern extrapolated lower.