USD/CAD might be done with its climb, as the forex pair is forming a double top pattern that looks ready to play out.
Think price is ready to break below its neckline soon?
Better keep your eyes on these levels so you don’t miss a big move!
As you can see from the chart above, the pair made a couple of failed attempts to bust through the ceiling at the 1.3650 minor psychological mark.Price is back to testing the double top neckline around 1.3525, and a break below this support area could confirm that a reversal is underway.
If that happens, we might just see a selloff that’s at least the same height as the chart pattern. That’d be roughly 125 pips yo!
Moving averages are suggesting that the odds are in favor of more downside for USD/CAD, as the 100 SMA just crossed below the 200 SMA.
At the same time, the pair has tumbled below both technical indicators, so these could hold as near-term dynamic resistance levels.
Just be careful since Stochastic is hovering around the oversold region to signal weakening bearish pressure. Turning higher would mean that buyers are still trying to take over, which might result to another pop higher for USD/CAD.
Also don’t forget to keep an eye out for the release of Canada’s jobs report and the U.S. NFP to gauge where this one’s headed next!