USDCAD has recovered its previous losses from February when the price reached a deep support level at 1.2459. This level was not very important at that time but currently can be used as a part of a reversal shape that can change the overall direction for this currency pair.
This situation puts in focus H&S that is still not confirmed yet. Level 1.2693 in this case can be used as a neckline but still needs more to be confirmed. Break above this level will be the sign of a changed overall trend unleashing big space for a bullish run. If the bulls do regain control and take USD/CAD north of 1.2700, significant resistance in the 1.2740-1.2750 area is worth noting (the early March and late February highs).
The Week Ahead
Starting with key events in the US; with all the recent focus on rising bond yields and expectations for higher inflation, Wednesday’s Consumer Price Inflation data release for February and 10-year government bond auction will both be in focus. If the former is stronger than expected and the latter shows poorer than expected demand for US government debt, this would provide fresh impetus to the recent move higher in bond yields and would likely be USD bullish. Meanwhile, US Weekly Jobless Claims on Thursday and Producer Price Inflation and Michigan Consumer Sentiment on Friday will both also be in the spotlight.