The Canadian Dollar (CAD) has been in focus after a report that U.S. President Trump was pushing for a preliminary North American Free Trade Agreement (NAFTA) deal to announce at a summit in Peru next week. The White House wants leaders from Canada and Mexico to join in unveiling a deal in principle at the summit. However, negotiation over the details would continue. Any agreement in principle would be a political win and little more than a symbolic move. But the prospect of an easing of tensions between the U.S. and Canada boosted the Canadian Dollar.
In the daily timeframe, USDCAD has formed a head and shoulders pattern with a measured target at 1.2580, which is also the 61.8% retracement from the lows in January to the highs in March. Downside support is at 1.2800, followed by the 50% retracement at 1.2675. A reversal above the neckline and horizontal resistance at 1.2880 would negate the pattern, with further upside resistance at 1.2980.
On the daily chart, CADJPY has reversed from the April 2017 lows at 80.860 but is running into resistance at the 23.6% Fibonacci level of 83.40. If the pair breaks 83.40, further upside resistance comes in at 84.80. However, a bearish reversal and break of the bear flag could lead to continued downside, with support at 80.86 and then 79.30