By: John Ursus
Timeframe: W1
Recommendation: Short Position
Entry Zone: 1.1100 – 1.1200
Take Profit Zone: 1.0475 – 1.0600
Stop Loss Zone: 1.1350 – 1.1500
The USDCAD has rallied sharply over the past 24 trading months. The rally took this currency pair from an intra-day low of 0.9632 to an intra-day high of 1.1278 from where the rally stalled and price action started to correct. This currency pair is now in the process of forming a double top formation and this may exercise downward pressure on the USDCAD over the next few trading weeks.
Forex traders should watch out a breakdown below the 38.2 Fibonacci Retracement level as this is likely to accelerate the sell-off in the USDCAD currency pair. Forex traders should consider splitting their lot size into multiple entry positions across a 100 pips range in order to decrease the risk on this trade. The upward potential appears to be rather limited while the downside potential remains very attractive.
