Donald Trump said that the trade talks in NAFTA are going well and this is enough for the Canadian Dollar to gain traction and trigger smiles on the CAD’s bulls faces. This comes a little bit unexpected from the technical point of view as the lines and dots were promoting the positive scenario on the USDCAD.
The price here, is in the long-term up trend (still) driven by the breakout of the upper line of the bigger flag pattern (black lines). At the beginning of the month, the price broke the horizontal resistance on the 1.317, which was very positive. Unfortunately, for the buyers, just for a while. The price came back below the grey area, creating a false breakout pattern. The drop accelerated yesterday, thanks to the comments from the POTUS.
Currently, we are on the upper line of the flag and the 50% Fibonacci line. As long as we stay above, we can still be optimistic but you have to be aware of the fact that this is the last stronghold for the buyers and a breakout will bring us a proper sell signal.