U.S. Dollar / Canadian Dollar
Short
Updated

USD/CAD) Down Trand Read The caption

796
SMC trading point update



Technical analysis of USD/CAD (U.S. Dollar / Canadian Dollar) on the 1-hour timeframe, with a focus on a potential double-top formation at strong resistance, followed by a drop toward support:


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Analysis Overview

Trend Structure: Downward-sloping channel with lower highs and lower lows.

Confluence Area: The current rally is approaching both the upper channel boundary and a significant horizontal resistance zone (~1.3660–1.3700).



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Key Technical Elements

1. Resistance & Double-Top Setup

The price nears the resistance zone (yellow) where it previously reversed (noted by red arrows).

A cap-and-float pattern (double/top-like structure) is projected: price pushes higher, hesitates, tests resistance again, then fails—a sign of weakening bullish momentum.


2. EMA 200 Interaction

The 1-hour EMA 200 (blue line at ~1.3635) sits just below current price.

A failure to sustain above this level reinforces the bearish case.


3. RSI Overextension

RSI (14) is around 64–69, indicating near-overbought conditions on this timeframe, suggesting a potential pullback.


4. Price Targets

Initial target: Lower channel boundary near 1.3556 (highlighted support).

Extended target: Beneath to 1.3540, aligning with the broader Demand zone.



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Proposed Trade Setup

Step Action Level

Entry Short near top of resistance/channel (after double-top confirmation) 1.3680–1.3700
Stop-Loss Above recent high and channel resistance ~1.3720
Take Profit 1 Near EMA 200/lower channel bounce ~1.3556
Take Profit 2 Extended move to demand zone ~1.3540
Estimated Move ~1.15% drop from midday highs –



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Risk & Event Factors

Scheduled Canadian or U.S. data releases (icons shown) could introduce volatility and disrupt technical patterns.

A breakout above ~1.3720 would invalidate this bearish thesis and shift bias bullish.


Mr SMC Trading point

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Summary

Expecting a cap-and-float double-top formation at key resistance near 1.3660–1.3700, followed by a trend continuation drop toward 1.3556–1.3540. The bearish setup is supported by a down-channel structure, EMA 200 failure, and overbought RSI conditions.




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