Technical Analysis: “Head and Shoulders” on 4H keeps USDCAD bears hopeful
Repeated failures to cross the 100-SMA dragged USDCAD traders to a decisive point with a “Head and Shoulders” bearish chart pattern luring sellers. However, a clear downside break of the neckline, around 1.2630, becomes necessary for conviction. Following that, a theoretical slump towards the 1.2300 level pops up on the chart. However, the 1.2600 round figure and the mid-November swing lows near 1.2490 may offer intermediate halts during the fall.
On the contrary, corrective pullback remains elusive until staying below the 100-SMA level surrounding 1.2795. Also acting as an upside hurdle is the 1.2800 threshold, a break of which could recall the buyers targeting December’s peak of 1.2965. It’s worth noting that 1.2850 and the 1.2900 round figure may offer a bumpy road towards the 2021 peak while the 1.3000 psychological magnet will challenge the USDCAD bulls afterward. Overall, USDCAD is up for extending the bearish consolidation but traders should wait for confirmation.