USD/CAD generates sell signal after massive winning streak

The USD/CAD epic winning streak is over, delivering an obvious topping signal on Tuesday.

There’s a couple of options available to traders: the first would be to sell now with a stop either above 1.3792 or Monday’s high of 1.3806. Possible targets include 1.3700 or 1.3647, depending on the risk-reward ratio you’re looking for.

The other would be to wait for a potential push towards 1.3792, allowing for a stop to be placed above Monday’s high or 1.3839 for protection. Targets would be identical to option one.

Momentum indicators have yet to confirm the price signal, but may encourage more traders to join the move if they too are triggered.

With no major data set for release in the US or Canada or Wednesday, traders may begin looking towards the US jobless claims, retail sales and industrial production reports on Thursday.

As I’ve discussed in the note attached, it would not surprise to see another ugly jobless claims report given disruptions caused by Hurricane Helene and Milton on the US Gulf states, creating downside risks for US bond yields and dollar.

Good luck!
DS