Monday, January 29, 2018

USD/CAD Is In A Strong Support Zone

The pair has been consolidating within the support zone between 1.2280 and 1.2330 for a third day, while the RSI indicator on the H4 time frame has been developing a divergence.

Although I expect a continuation of the downward trend the probability to see a correction to the upside within the consolidation is quite large. If the limit of the RSI divergence is reached, then the correction could reach 1.2520.

I doubt that today we will see any significant movement, but we could follow how the D1 time frame bar will close in a few hours. If it closes as a spinning top or as a doji bar right above the support of the lower band of the Bollinger Bands that could be another signal for a rebound and a correction to the upside before the downward trend continues.