The Expectation For A Breakout Of The USD/CAD Trend Channel Remains Valid

The USD/CAD pair once again returned within the limits of the range and even formed a new one higher than the one before, reaching 1.35979 (compared to 1.35883 on the 14th Nov 2016), but then it fell down to the support trendline of the channel visible on the weekly time frame that has been forming since 1st May 2016.

The expectation for a breakout of the trend channel remains valid, and in my opinion it will likely happen to the downside. Should it occur we could see a significant move to the downside. For the moment on the smaller time frames like 4H and 1H there is a divergence, which is a signal for a possible corrective move to the upside, the limit of which is at 1.33.

It is obvious that the USD isn’t nearly as strong in this pair as it is in USD/JPY or in EUR/USD so the breakout to the downside is a matter of time.