Last week, we featured a developing USD/CAD Double Top pattern at 1.0985, suggesting that the pair may fall further after breaking the pattern’s point of reference at 1.0900.
Though the pair did briefly tick down to 1.0860, the bears could not overcome the broad-based U.S. dollar rally, and rates have since recovered back to the key 1.0985 barrier. Now, traders are asking, “Could we form a triple top, or is the pair more likely to break this ceiling?”
From a fundamental perspective, the greenback rally has strong support. Recent economic data has been solid, especially in contrast to the USD’s major rivals, and yesterday’s Fed minutes suggested that the central bank is growing increasingly concerned that it may be falling behind the curve.
That said, Canada has also been one of the strongest-performing major economies of late, highlighted by Friday’s stellar jobs report revision, which showed nearly 42k new jobs were created in The Great White North. With both North American nations sitting on solid fundamental footing, technical analysis may break the stalemate.