The USDCAD has formed a bearish engulfing bar (BEEB) on the two day price action chart. You can read more about how to trade engulfing bars here: Engulfing Bar Tutorial. This BEEB has formed right up at the swing high and is rejecting resistance. This pair has been a bit all over the place of late with the most recent momentum higher.
The biggest risk with this two day bearish engulfing bar is the support area that it is trading into. On the chart below it shows the support that price has to break if price is to make any sustained moves lower. If this first support can break, then the next support of note comes in around 1.02245.
If price continues with the recent trend higher and goes onto make new higher highs and lows we could then look for a new high to be made and the next resistance to be tested around 1.0415.
USDCAD TWO DAY CHART | 31 MAY 2013
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