USD/CAD Analysis: Double Top Divergence Sparks Bearish Sentiment

Amidst market fluctuations, the USD/CAD pair finds itself under pressure following a notable double top formation around the 1.3600 region, coupled with a divergence spotted on the Relative Strength Index (RSI) indicator. Currently hovering around 1.3523, the pair is poised for potential bearish movement in today's trading session.

The uptick in WTI crude oil prices, inching closer to $79.50 per barrel, serves as a significant factor influencing the USD/CAD dynamics. This surge in oil prices comes on the heels of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) decision to extend voluntary oil output cuts of 2.2 million barrels per day (bpd) into the second quarter, aligning with market expectations.

In Canada, the S&P Global Manufacturing Purchasing Managers Index (PMI) recorded a modest improvement, climbing to 49.7 from the previous 48.3. Despite this uptick, the index remains below the crucial 50.0 threshold, indicating a contraction in the manufacturing sector.

Looking ahead, market focus shifts to the Bank of Canada (BoC) as it prepares to announce its latest interest rate decision next Wednesday. With market expectations leaning towards the central bank maintaining its current interest rate at 5.0%, investors anticipate potential market implications.

In line with these developments, our analysis suggests a downward push in the USD/CAD pair, with a potential take-profit target identified at 1.35250. As market dynamics continue to evolve, prudent monitoring of key economic indicators and central bank decisions remains paramount for informed trading decisions.

Trade closed: target reached:

Trade closed: target reached: