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USDCAD Short-term Topping Formation

USDCAD Short-term Topping Formation

Paul Robinson, Strategist

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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