People’s expectation were that there would be a correction to the upside after the last drop, but nothing of the sort has happened so far. After over 44 hours of a tight range when the London session opened today the pair fell with over 50 pips, retracing the small move to the upside that had been going on for the past 5 days, as you can see for yourselves on the daily time frame.
If the pair does break below the support at 1.2630, which can be seen on the 4-hour time frame, USD/CAD could start falling towards the next significant support level around 1.2500, visualized by the lower band of the Bollinger Bands indicator on the daily time frame.
In the alternate scenario the pair will bounce off the aforementioned support and it will continue climbing towards resistance trend line (the red line), after which it will start falling again.
At this point a deep corrective movement to the upside, however, seems less and less likely to me.
A prolonged and steady decline!
ReplyDeleteLet's see what effect the fundamentals tomorrow will have on it.
ReplyDeleteGood post!
ReplyDeleteGood analysis!
ReplyDeleteNice bearish channel.
ReplyDeleteI really like the depth and understanding of your analysis.
ReplyDeleteGood point.
ReplyDeleteGood to know.
ReplyDeletegood post.
ReplyDelete