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USD/CAD Double Bottom Formation (July 18, 2013)
USD/CAD seems ready to bounce back from its recent selloffs, as the pair formed a reversal pattern on its 1-hour time frame.
Recall that USD/CAD is already finding support at a retracement level and former resistance around 1.0375. The pair made a couple of attempts to break below this barrier recently but failed.
With that, a double bottom has formed with support at the 1.0350-1.0375 area and a neckline near 1.0450. A breakout above the neckline would confirm that the short-term downtrend is over and that a rally might take place.
The pattern is around 100 pips tall so the breakout could go as high as 1.0550. Aiming for this level with a stop below 1.0400 would yield a 2:1 trade.
By Kate Curtis from Trader's Way
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