Talking Points:
- USDCAD Head-and-shoulder formation
- Breaking 2-week up-trend line
- 1-2 Day potential for a ~90 pip decline
USDCAD has been one of the strongest USD pairs of late, however; a daily reversal bar yesterday with the formation of a Head-and-shoulders pattern below a 2-week trend-line leaves it vulnerable to a near term correction. In addition, there have been several 4-hr reversal bars during the past couple of days near the all-important psychological level of 12000. A break of 11925, below Tuesday’s low, also triggers the H&S formation by breaking the neck-line. The height of the pattern dictates a measured move of approximately 90 pips from the neckline or a move down towards 11840, erasing this week’s gains.
---Written by Paul Robinson
To contact Paul, email him at instructor@dailyfx.com
