Saturday, October 22, 2016

USD/CAD Is Trying to Break above the Trendline

USD/CAD is trying to break above the trendline as it could be expected considering the powerful bullish hammer bar that formed on the daily time frame on 19th October 2016. Such a powerful bullish bar is an unambiguous signal that the bulls are fully in control, i.e. the traders who aggressively bought the pair could barely wait for it to reach its lowest level for the day: 1.30056.

The same kind of a strong bullish hammer bar can be seen on the 4-hour time frame, and if we take a look at the shorter time frame – the 1-hour one, we will see that the aggressive buying has developed literally for one hour and after that the bulls continued controlling the pair, leaving nothing for the bears.

Towards the end of the market session on Friday the pair had broken slightly above the resistance trendline and on the 1-hour time frame we can see that USD/CAD has begun forming a range above it, which is a signal that the resistance will become a support and the pair will continue climbing. I wouldn’t be surprised if the pair forms a bullish gap when the market opens next week.
Either way, my expectation for the next week is that the pair will continue climbing towards 1.34000 and 1.35000.