USDCAD — Bearish Reversal SetupUSD/CADOANDA:USDCADMohtashamRQUSDCAD — Bearish Reversal Setup After a prolonged and aggressive bullish run that pushed USDCAD from the 1.3760 region all the way up to 1.4015, the market is now showing early signs of exhaustion. What was once a clean and powerful uptrend is beginning to crack and the chart is giving us several reasons to pay close attention to the downside. Bearish Divergence The most significant signal on this chart is the Bearish Divergence forming on the RSI. While price has been consistently printing Higher Highs, the RSI has been making Lower Highs, moving in the opposite direction of price. This is a classic sign that the bullish momentum is fading beneath the surface. The buyers are losing strength even as price continues to push higher. When divergence appears after a strong trending move, it is one of the earliest and most reliable warnings of a potential reversal ahead. Distribution Phase Following the strong rally, price has entered a consolidation zone near the highs, forming what appears to be a Distribution Phase. This is the stage where price is struggling to push higher, momentum is weakening and the structure is starting to shift. The market is coiling near resistance at 1.40150, unable to make a clean new high. The Neckline The critical level on this chart is the neckline at 1.39739. This is the support level holding the current structure together. A clean break and close below 1.39739 would confirm that the distribution phase is over and sellers have taken control. This would be our trigger to enter the trade. Two Targets Rather than closing the entire position at one level, this setup offers two take profit zones allowing us to manage the trade in stages and maximize the potential of the move. The first target sits at 1.39324, a nearby support level where we can book partial profits and secure the trade. If price continues to push lower and momentum remains bearish, the second target sits at 1.38913, a stronger support zone that aligns with previous price structure from mid September. By scaling out in two stages we protect profits early while still keeping a portion of the trade open for the bigger move. Trade Plan: 🔴 Sell Stop: 1.39739 (neckline break confirmation) 🔵 Stop Loss: 1.40150 (above last Higher High) 🟢 Take Profit 1: 1.39324 (first support zone) 🟢 Take Profit 2: 1.38913 (deeper support zone) Until the neckline breaks cleanly, this remains a wait and watch setup. No confirmation, no trade. Not financial advice. Trade your own plan.