- USD/CAD bears are taking on the 1.26 area with a fresh cycle low at 1.2588.
- The longer-term outlook will be significantly bearish should the price break 1.2580 on a daily closing basis.
USD/CAD has been steadily carving out a bearish head and shoulders pattern on the daily time frame for the start of 2022, as per the following original analysis: USD/CAD Price Analysis: Bears line up for their discounts
Tracking the performance of the pair at the start of this week, the following analysis noted the M-formation: USD/CAD Price Analysis: The bearish playbook is unfolding, daily M-formation in focus
The price was leaving an M-formation on the chart as illustrated above and was drawing the bulls into the neckline.
This was seen on the 4-hour time frame as in the following prior analysis:
Since the analysis, the price has indeed played out according to the 4-hour forecast as follows:
The price mitigated the imbalance into the daily M-formation's neckline near 1.2700/10 prior to the recent break to test 1.26 the figure.
At this juncture, the neckline of the daily head and shoulders would be expected to act as resistance near 1.2580/1.2610. Bears can look near to 1.25 the figure and 1.2480 as the next area of expected support:
USD/CAD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.