The US dollar remains trapped inside a wide price range against the Canadian dollar, as volatility in oil prices and the greenback continues to drive two-way trading action in the pair.
USD/CAD analysis shows that the next major move in the pair should take place once the 1.3850 to 1.4180 price range is broken.
USD/CAD medium-term price trend
The US dollar is struggling to find a directional bias against the Canadian dollar, as oil prices and the greenback remain volatile.
Due to a powerful breakout rally earlier this year, the USD/CAD pair is trading well above its 200-day moving average, around the 1.3350 level.
USD/CAD technical analysis shows that the price remains trapped within a large horizontal price channel between the 1.3850 to 1.4180 levels.
According to the size of the channel, once the price breaks the channel with conviction, a directional move of greater than 300 points may take place.
It is certainly noteworthy that traders should expect more range-bound trading inside the price channel until multiple daily price closes outside of the channel take place.
USD/CAD short-term price trend
USD/CAD analysis shows that the pair still has a short-term bearish bias while the price trades below the 1.4050 support level.
The four-hour time frame currently shows that a bearish reversal pattern has formed, with a substantial downside projection.
Looking more closely at the pattern, the neckline is located around the 1.3860 level.
According to the size of the bearish pattern, the USD/CAD pair could decline by around 400 points if the 1.3860 level is breached.
Bulls need to rally the price above the head of the 1.4280 resistance level to invalidate the bearish pattern. A counter rally towards the 1.4660 level could then occur.
USD/CAD technical summary
USD/CAD analysis shows that the price is currently trapped within a large horizontal price channel. A bearish reversal pattern is also unfolding across the lower time frames.