USD/CAD Broke Below The Support Trend Line

The pair broke below the support trend line around 1.3465 as I thought it would in my analysis yesterday. This is the first such breakout since the pair started moving in the consolidation channel on 1^st May 2016.

It is possible for the pair to retrace in order to test the breakout level. If does remain below the trend line, however, I think we can expect a considerable move to the downside. The limit of the trend channel, should it be reached, is around 750 pips, which means a possible drop towards 1.2430. Of course, these expectations are based on the weekly time frame, which means that such a move to the downside will develop in the long term. The closer target for the moment is at 1.2900.

In my opinion, the scenario for a move to the upside is becoming less and less likely at this stage.