The USDCAD has certainly been one of the better pairs to trade this year due to the fact that it’s been very trendy ever since the BOC stated that the rate cuts have done there job. After testing previous structure lows in late July, the pair has given us a small retracement before finally making a substantial break & close below to end last week.
Looking left, the next levels of support that catch my eyes come at $1.22 & $1.20, giving us a lot of potential room for bearish trend continuation trades. We never know how the market will move towards these levels, if we indeed do, but based off of my experience what I would expect is either a consolidation pattern such as a flag or pennant, or a pullback into previous structure followed by an extension.
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