Trade idea: USDCAD
Oil has been a touch weaker of late, which hasn’t been helping the Loonie, combine this with a stronger dollar and the cross will want to move higher. However, the question remains will USDCAD break to the upside through the 50-day SMA and downtrend line resistance or will price behave like it has in the past with short lived rallies being sold into the 50-day SMA. The RSI is back up around the 56 resistance, marking tops in prior price rallies. What may work in the bulls favour, however, is what looks to be a potential inverted head and shoulders formation (typically bullish). The neckline would come in around the 1.263 level, if the formation plays out the projected move would be to circa 1.29. Price resistance around 1.27 would have to be cleared first. For the short the rallies camp, a good first initial target to the downside would be around 1.25 support. Lower down we have the March 18 lows of 1.236.