Alan Collins believes that USDCAD will go lower after Tuesday’s profit taking and is looking to short the pair.

According to Collins, USDCAD has been rising from June’s low and last week traded to the most positive levels in 11 years. But on Tuesday, USDCAD saw the most negative performance for almost 2 months and Collins says signals point to lower levels yet before buying interest is renewed.

Collins says his biggest concern is failure at the 13-day moving average and he will therefore be modestly short at the open, adding shorts at the 1.2975/80 area. His targets are 1.2910, 1.2877 and 1.2820 with a stop at 1.3010.