The USDCAD has rallied over the past few sessions and formed a double top formation as visible in this H4 chart. We believe this pair will correct down to its rising support level and potentially down to its 200 DMA from where the next move can unfold.
MACD has declined in comparison to the first peak it formed and therefore does not confirm strength behind the recent move higher which add validity to the double top formation. RSI has reached overbought territory and a break below this level should accelerate the correction.
We recommend a short position at 1.0075 with a potential second entry level at 1.0150. Should this pair break the 1.0125 level to the upside we advise traders to place a stop buy order at that level before adding new short positions to this trade.
Traders who wish to exit this trade at a loss are advice to place their stop loss level at 1.0125. We do not use stop loss levels and will execute this trade as recommended. Place your take profit level at 1.0000.
