Never mind if the USD/CAD pair broke below the double top neckline!
The U.S. dollar rose above the short-term support level at the 1.3400 handle and tested the highs in the 1.3535 zone following yet another robust NFP report.
However, in front of several major events this week, such as the release of the US CPI and retail sales data, market participants appear to be modifying their long USD wagers.
The USD/CAD pair is currently aiming for the range support around 1.3365, which is slightly above S1 (1.3340), after retreating down below the pivot point level (1.3470).
An extended downward trend of approximately 170 pip, which is the same height as the rectangle pattern, might be initiated by persistent bearish momentum below this area.
However, if the floor holds once again, USD/CAD may return to R1 (1.3530), the range resistance, or possibly break through for a rally to R2 (1.3600).
In any case, when trading this pair, remember to factor in the typical USD/CAD volatility, which is close to 65 pip movements.
Regardless of the bias you choose to trade, always employ trading plans and use the greatest risk management techniques!
