Although in a healthy uptrend, USDCAD has run into resistance at ~1.3070 which happens to be a price level on the weekly chart that has previously been tested (as support in April 2004 and resistance in March 2009). Price closed below this level on Friday as a high test bar. Coupled with bearish divergence on the Stochastic and RSI indicator a price action behaviour is suggestive of bearish sentiment. Judging by the optimistic Fed outlook to raise interest rates, and positive expectation from the US economy from improving economic data, a stronger US Dollar is likely to continue. The following short setup banks on a technical perspective to take advantage of a sell signal; potentially a temporary run.
entry - below low of high test bar
stop loss - above high of high test bar
target - previous level at ~1.2771
entry - below low of high test bar
stop loss - above high of high test bar
target - previous level at ~1.2771