USD/CAD Drops as Double Top Forms After Softer-Than-Expected PCE Data

USD/CAD is trading lower on the day, reversing its persistent uptrend that has dominated price action since early May with only a handful of down days recorded during that stretch. The decline is being driven primarily by softening U.S. Treasury yields following a softer-than-expected Personal Consumption Expenditures (PCE) inflation report, which has weighed broadly on the U.S. dollar. From a technical perspective, the pair has formed a double top pattern, a classic bearish reversal signal, which is adding conviction to the selling pressure. The double top formation suggests that buyers failed twice to push through the same resistance level, opening the door for a deeper corrective move. Traders should monitor whether sellers can sustain momentum below the neckline of the double top pattern, which would confirm the reversal and potentially target lower support zones. Near-term price action will likely depend on further developments in U.S. economic data and whether the decline in yields continues to erode dollar demand against the Canadian dollar.