Technical analysis: USD/CAD forms bearish Head & Shoulders pattern with key support at 1.3725
The broader US Dollar trend remains positive, but the reversal from the 1.3800 area earlier on Monday suggests a Head & Shoulders pattern is in progress. This is a common figure to signal a trend shift and comes after a near 3% USD rally in April.
Immediate support is at 1.3725, which is the neckline of the H&S pattern. Below here, the next support levels are 1.3665 and the target of the figure, coincident with the 50% Fibonacci retracement of the April rally at 1.3620. On the upside, above 1.3800 the focus would shift back to the 1.3850 high
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