USDCAD - MONTHLY CHANNEL RESISTANCE + DOUBLE TOP = REVERSAL?
USDCAD may possibly be hinting at a major reversal on the monthly chart given the confluence of a few different factors. The most significant one is the price being close to the upper boundary of the ascending channel. It is of course possible that this resistance level will be breached but as we can see the steepness of the trendline formed in recent months (the blue line) is quite significant and as such there's a good chance that we'll likely be seeing a retracement to the 1.2500 level first before we see any more upward movement. Moreover, we may also be seeing a formation of the head-and-shoulders pattern marked by the green circles on the chart. The key word here is 'may'. If we are to see a major reversal then there's a good chance that it'll be marked by a double-top closer to the upper channel trendline. Either way, this is a good pair to keep an eye on because the market is obviously at an interesting junction where buyers and sellers will have to use a bit more force than usual to support their positions. Also, a lot of it will depend on what oil will be doing price-wise. Should the price of oil rise then it's a given that this pair will drop. Should interest rates rise in the US then there's a good chance we might see this pair go all the way up to 1.4000 or higher. Always keep an eye on the big picture.
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