USD/CAD – A short term trade

Price reached a low of 1.3041 last week with bullish divergence warning from MACD. Price went to a high of 1.3207 but has since declined to 1.3129. We think price may have found a bottom at 1.3129. During the decline, MACD stayed positive and bullish, which is a hint of a corrective decline. Price has since rallied after a bullish Engulfing candlestick reversal pattern.

We think price should test its the previous high of 1.3202. A break of this resistance can lead price to test the high of 1.3230-1.3240. Stop should be placed at 1.3215 with target at 1.3230.

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