USD/CAD: Will Confirm the Double Top?
The Daily trend is in a Downtrend technically indicated by following:
• Price is currently trading BELOW the Uptrend-line.
The downtrend is confirmed from the MAs. Bearish cross observed- MA10 cross under MA20.
RSI:
• RSI is BELOW the equilibrium level- 50. Bearish Momentum.
At the price chart, we are focused on a developing of “Double top reversal pattern”. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal. With any reversal pattern, there must be an existing trend to reverse. In the case of the Double Top Reversal, a significant uptrend of several months should be in place. Many potential Double Top Reversals can form along the way up, but until key support (S1) is broken, a reversal cannot be confirmed.
Considering all the points above, we are in a “watching and waiting” situation.
Bearish Scenario:
With a break (daily close) below the support-daily trend-line, we will recommend SHORT POSITIONS for the no position holders on USD/CAD. Take profit at 1.2800(161.8% Fib) & 1.2600(the distance from support break to peak can be subtracted from the support break for a price target) and stop loss should be a bit above the S1, thus the stop loss is at 1.3200 area.
For Short-holders we will recommend to HOLD their short positions and adopt the same stop loss and take profit orders as mentioned above.
Bullish Scenario:
While sentiment remains unclear for long position, it is better to observe a confirmation of a bullish reversal pattern. Therefore we are waiting for a reversal move.
• Price is currently trading BELOW the Uptrend-line.
The downtrend is confirmed from the MAs. Bearish cross observed- MA10 cross under MA20.
RSI:
• RSI is BELOW the equilibrium level- 50. Bearish Momentum.
At the price chart, we are focused on a developing of “Double top reversal pattern”. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal. With any reversal pattern, there must be an existing trend to reverse. In the case of the Double Top Reversal, a significant uptrend of several months should be in place. Many potential Double Top Reversals can form along the way up, but until key support (S1) is broken, a reversal cannot be confirmed.
Considering all the points above, we are in a “watching and waiting” situation.
Bearish Scenario:
With a break (daily close) below the support-daily trend-line, we will recommend SHORT POSITIONS for the no position holders on USD/CAD. Take profit at 1.2800(161.8% Fib) & 1.2600(the distance from support break to peak can be subtracted from the support break for a price target) and stop loss should be a bit above the S1, thus the stop loss is at 1.3200 area.
For Short-holders we will recommend to HOLD their short positions and adopt the same stop loss and take profit orders as mentioned above.
Bullish Scenario:
While sentiment remains unclear for long position, it is better to observe a confirmation of a bullish reversal pattern. Therefore we are waiting for a reversal move.
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