Technical analysis
The USDCAD pair is at risk of further heavy losses after forming a large head and shoulders pattern across the four-hour time frame.
The four-hour price trend remains technically bearish while the USDCAD pair trades beneath its 200-period moving average, around the 1.2600 resistance level.
What the possible outcomes are
In our most likely scenario, the downward price trend continues as the USDCAD pair ignites the mentioned bearish head and shoulders pattern on the four-hour time frame.
Alternatively, the USDCAD pair will stage a recovery back towards the 1.2550 resistance level as a final right-hand shoulders forms to complete the head and shoulders pattern.
Key levels
Support 1.2430 1.2250 1.2020
Resistance 1.2520 1.2550 1.2600
