Saturday, April 09, 2016

USD/CAD Has Been Falling Without a Correction for 12 Weeks Now

Although the pair fell with 1200 pips for that time period it seems that the move to the downside will continue.

There was a moment when it seemed that the pair would bounce off the weekly support at 1.2922 (on 18th March) and many traders I communicate with believed that would be the beginning of the expected correction.

The pair continues proving those expectations wrong for four weeks now.

Despite the small moves to the upside USD/CAD keeps returning to the support coinciding with the lower band of Bollinger Bands indicator on the weekly time frame and testing that level again and again. The line, meanwhile, is moving further and further down and the pair will most likely break below it sooner or later. Not to mention that meanwhile it formed a new low. I have little doubt that it will succeed in doing so and after that it will drop towards the support 1.2660 – 1.2650, visualized by (EMA)89 on the weekly time frame (the green line), as well as the middle line of Bollinger Bands on the monthly time frame.

That level of support is incredibly strong and I think the pair will bounce off of it and correction will really begin.