USDCAD declines on double top formation, weaker PCE data

Key Facts

With the US dollar weakening after disappointing inflation data, USDCAD traded lower today, forming a double-top pattern at resistance 1.4247 and hitting a low of 1.41952. Softer-than-expected US PCE data fueled selling pressure by reinforcing expectations of a Fed rate cut. The Bank of Canada's June meeting minutes revealed a cautious, wait-and-see stance, keeping the pair sensitive to technical levels.

On the data front, Canada's latest inflation print on June 22 showed a 3.2% YoY rise, above the 3.0% forecast, lending support to the Canadian dollar and adding downside pressure. Per market data, USDCAD closed at 1.42021 on June 25, with the 100-hour moving average at 1.41966 serving as key support for the correction.

Traders are watching for sellers to break below the 100-hour MA (1.41966) to extend the correction toward lower levels. On the upside, the double top at 1.4247 remains a tough barrier. Next week's US jobs data and the Bank of Canada July meeting will be key catalysts for the pair's next directional move.