USD/CAD – Re-test of Inv. head and shoulder neckline likely

Hourly chart shows Cypher pattern Leg D has resumed and it comes around 1.2950 levels (78.6% of XC). Note that Leg C has risen to 1.417. The rule says candle should not close above 1.414. Thus, the formation is valid.

• The hourly RSI, at 43.00, is heading lower, thus indicating room for losses.
  

• Hence, spot could drop to inverse head and shoulder neckline level around 1.3034, which if breached would expose rising trend line support at 1.2977 (just few pips away from Leg D level of 1.2950).
  

• On the higher side, a move above 1.31856 would signal continuation of the bullish move that begun post inverse head and shoulder breakout of last week.