USD/CAD Began A Correction, There Could Be A Move To The Upside To 1.2550 - 1.2600

USD/CAD is behaving in the typical way a pair behaves in after it reaches and breaks out below the support marked by the Bollinger Bands indicator. I have observed that behavior thousands of times and I can say with a great degree of certainty that such behavior is, indeed, typical – the pair reaches the support, breaks out below it, and just when the trader thinks that the depreciation will continue, there is a rebound. That applies to all time frames – from the M5 to the monthly one.

The only difference is in the duration and the depth of the correction in terms of pips. In this case we are examining the monthly time frame, which explains the considerable rebound – 270 pips until now.

If we examine the W1 time frame, we will notice something both interesting and important: at the bottom of the move to the downside there is a spinning top bar, which is a strong signal for a reversal.

In my opinion, 1.2430 – 1.2450 is the first target of the rally. In case USD/CAD continues moving north we could expect it to reach 1.2550 - 1.2600.