USD/CAD: Down-Trend Expected To Extend After H&S Break

USD/CAD broke lower after forming a head-and-shoulders top pattern. It reached the 61.8% fib extension of the height of the H&S down, the minimum expectation for the pattern, and then started pulling-back. It has since started going back down again, and I expect the down-trend to continue. Head-and-shoulders are normally reliable indicators of quite important changes in the trend and so this could the start of a substantial move lower. However, initially I see prices falling to the 1.2000 because it is a significant psychological round-number, at which point there will be a review, pause and possible continuation lower, or perhaps a substantial bounce. Such a continuation lower could be confirmed by a break below the current 1.2087 lows.

USD/CAD Daily Chart

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