USD/CAD Price Analysis: Bulls retreat from double top formation near 1.2180

• USD/CAD clings to modest losses on Monday.
• Bulls are facing stiff resistance near the 1.2180 mark.
• Overbought MACD looks exhaustive, warns against aggressive bids.

The USD/CAD pair edges lower in the initial European trading hours on the fresh trading week. The pair rose near to the multi-month high on Friday, however,  failed to sustain the gains.

At the time of writing, USD/CAD trades at 1.2151, down 0.04% for the day.

USD/CAD 4-hour chart

On the 4-hour chart, the USD/CAD pair forms a double top formation near the 1.2180 mark, which initiates the downside momentum in the pair. A double top formation is a bearish reversal technical formation.

In doing so, USD/CAD bears are dominating the trend and in the progression to meet the 23.6% Fibonacci retracement, which extends from the low of 1.2007, at 1.2137. The mentioned level is the critical level as it's a resistance-turned-support level.

The  Moving Average Convergence Divergence (MACD) indicator trades in the overbought zone signaling overbought buying opportunities. Any downtick in MACD could prompt the bears to target the 38.2% Fibonacci retracement at 1.2116 followed by the 1.2075 horizontal support level.

Alternatively, if price moves and sustains above the session’s high then USD/CAD bulls could continue to push higher toward the May 13 high at 1.2200 followed by the 1.2220 horizontal resistance level.

The next area of resistance would appear at the 1.2288 level, which is high on May 6.     

USD/CAD additional levels