Here we have a valid bearish crab pattern potentially forming on FX:USDCAD daily time frame. Just by reading price action, we see this market is in strong bullish trend. Keep in mind that there are still no signs of this pair slowing down just yet. Since the pattern is on the daily time frame the stop loss will not be suitable for every one, but we should be looking for any type of shorting opportunities on lower time frames with manageable stop loss levels, as the market reaches the 161.8% fib extension level. I personally will also be looking on lower timeframes to enter short near the 161.8% level. This market has been diverging very strongly on the weekly timeframe, shown by the RSI divergence on the chart under this description. See the chart above for more details.
NOTE #1: we got many high impact news events coming out this week. See the chart above for the list of these events.
NOTE #2: markets can still go higher even when diverging for long periods of time. Thus we need to see major structure levels break before taking divergence into account.
Illustration of strong RSI divergence on weekly chart:
Illustration of crab pattern completion point right at previous structure highs:
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UPDATE #1: Hello traders, short trade is active now. Keep in mind the Fed rate news today. Reduce exposure as much as possible as we get closer to the highly volatile event. All the Best :)