USD/CAD is one of the pairs I am monitoring for a trade signal confirmation. The price has been trading in a sideways range and recently pushed towards the the top of the range.
USD/CAD Trade Setup: Short on a Break Below 1.3255
RSI hit overbought area and retreated as the price showing declining upside momentum at the 200 days simple moving average.
The pair is also near the top of the sideways range, just below the range key resistance at 1.3350 area.
Last Friday, the price formed a shooting star. I am not taking this shooting star too seriously as it happened following few days of sideways movement, instead of a clear directional up move. (To know more about the key reversal candlestick patterns, check out my favorite Forex reversal candlesticks)
However, a break below 1.3255 level may lead to a bearish reversal within the context of the overall sideways trend. As its a possible short term support level.
The support area around 1.3255 is clearer on the 8 and four hour charts.
I will be watching for an 8-hour candle or two 4-hour candles to close below 1.3255 -that would also take the two short term rising trend lines- to to target 1.3135 area.
Trade with Care