Tuesday, October 24, 2017

USD/CAD Could Fall To 1.2570

USD/CAD is in a resistance zone (1.2650 – 1.2670) on the daily time frame and it has not been able to break out above it for three days.

At the same time a divergence has appeared on the H1 time frame between three highs which is a hint that the pair could drop to 1.2570.

The Bollinger Bands indicator also signals for a possible drop, since there has been a breakout on the D1, H4 and H1 time frames and it is logical, considering the way this indicator works, for the pair to move back within the boundaries of the indicator before it continues moving north. Usually in such cases the correction continues to the breakout level of the indicator.

This scenario could be invalidated in case there is a breakout above the trend line of the divergence marked as a ray on the chart.