After forming a triple bottom near 1.1940 on May 14, USD/CAD rushed up pretty fast. Currently, the pair formed a double top at 1.2562, where the downtrend trendline has been rejected at the same time.
The overall uptrend seems exhausted and the corrective move down might follow. The Demarker oscillator, which formed a bearish divergence, confirms that. In addition, Fibonacci retracement applied to a low of 1.1918 and a high of 1.2562 shows that 23.6% support level (S1) has been taken out and now the pair should head further down towards the next support at 38.2% Fibonacci retracement – S2 (1.2316).
The price is likely to test the downtrend trendline once again before it will start dropping. Therefore, consider selling anywhere between the current level (1.2460) and the trendline (approximately 1.2500). The next strong support is seen at S2 (1.2316) that could be treated as the nearest downside target.
Support: 1.2410, 1.2316, 1.2241, 1.2164
Resistance: 1.2562, 1.2653
The material has been provided by InstaForex Company – www.instaforex.com