USDCAD just had it's highest daily close of 2021 on Friday 17th December, at 1.28912. Daily highs have exceeded this level 3 times this year but each time the price was rejected and the price failed to close above that level.
So as priced has reached the highest daily close since December 22nd 2020, it has entered this area of rejection shown on the chart, while also displaying clear Bearish RSI Divergence as price climbs to the high while RSI slopes down.
While we may be in a new uptrend - creating a new higher low in October and pushing for new 52week highs would suggest so - this looks close to a prime spot for USDCAD to take a breather and see a short term reversal.
That being said, this is absolutely a spot where waiting for some confirmation of a reversal is a must - at the time of writing the momentum on lower time frames is strong, and bulls will have their eyes set on the nice round number of 1.29500, just a hairs breadth above the high of year achieved on August 20th.
So as priced has reached the highest daily close since December 22nd 2020, it has entered this area of rejection shown on the chart, while also displaying clear Bearish RSI Divergence as price climbs to the high while RSI slopes down.
While we may be in a new uptrend - creating a new higher low in October and pushing for new 52week highs would suggest so - this looks close to a prime spot for USDCAD to take a breather and see a short term reversal.
That being said, this is absolutely a spot where waiting for some confirmation of a reversal is a must - at the time of writing the momentum on lower time frames is strong, and bulls will have their eyes set on the nice round number of 1.29500, just a hairs breadth above the high of year achieved on August 20th.
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Where to from here? As mentioned in the original idea this may still be a new uptrend, we were just trying to catch a small bounce where price was short term overextended and meeting resistance.
A break down below the trendline or a continuation upward seems like a coinflip at this point, so I would simply go neutral and wait for the next directional cue.