USD/CAD seems ready to bounce back from its recent selloffs, as the pair formed a reversal pattern on its 1-hour time frame.

Recall that USD/CAD is already finding support at a retracement level and former resistance around 1.0375. The pair made a couple of attempts to break below this barrier recently but failed.

With that, a double bottom has formed with support at the 1.0350-1.0375 area and a neckline near 1.0450. A breakout above the neckline would confirm that the short-term downtrend is over and that a rally might take place.

The pattern is around 100 pips tall so the breakout could go as high as 1.0550. Aiming for this level with a stop below 1.0400 would yield a 2:1 trade.

By Kate Curtis from Trader’s Way