CAD: Technical indicators favor additional USD gains - BBH

The US dollar carved out a nearly textbook perfect head and shoulders pattern against the Canadian dollar last month as it broke the neckline (~CAD1.28) in early April, explains the research team at BBH. 

Key Quotes

“The measuring objective was CAD1.2475.  The greenback's downside momentum began easing, though a marginal new low was set on April 17 (~CAD1.2530).  A combination of the continued rise in US rates, a patient Bank of Canada, and soft Canadian CPI and retail sales saw the greenback jump to almost CAD1.2770.”

“The dollar finished above its 20-day moving average (~CAD1.2735) for the first time in a month.  The pre-weekend rally also saw the dollar meet the 38.2% retracement objective (~CAD1.2755).  The 50% retracement (~CAD1.2825) corresponds to some old congestion and provides a reasonable near-term objective.  The technical indicators favor additional US dollar gains.”