Price has already closed below 3-3 SMA and then closed above it, made a new high. If the price closes back below 3-3 SMA, Double Repo pattern will be formed. Its classical target is 50% retracement of recent thrust up. SL few pips above recent high.
The pattern will be supported by bearish divergence.
Strength of USD got combined with weakness of CAD today. USD/CAD broke the rectangle to the upside unexpectedly against the trend. Therefore, we entered buy.
Fib 61.8 of recent swing on H4 makes a confluence resistance with Fib 38.2 of whole swing down on D1. That is where we set TP. The confluence resistance areas is near to previous swing low, which also is a natural resistance level.
The 3 Drive pattern made on daily/D1 time-frame is a reversal pattern. Even if it will fail to cause full reversal, it can at least cause enough upward retracement to reach TP.
Risk: If USD/CAD returns back to downside and closes below rectangle, the buy setup will fail.
