Essentially what I wrote about an alternative scenario was exactly what happened.
The pair rallied a bit more and one could conclude that this is just deepening the RSI divergence, but my experience with divergences led me to conclude that should there be a breakout above the RSI trend line compared to the price trend line, we should rather expect a new rally.
While the pair is climbing the RSI trend line is moving further down, but there are now two breakouts above it on the H1 time frame. And that in turn means that this isn’t a case of the divergence deepening, but rather the pair is preparing to rally sharply.
Later today we are expecting the BOC to announce its interest rate, its monetary policy report and to hold a press conference. I think that during the news we will see such the CAD move sharply to the upside.
Let us wait and see how the pair will develop.
That's good to know, thank you.
ReplyDeleteGood point. I'll keep a close eye on it.
ReplyDeleteGood insight.
ReplyDeleteGood post!
ReplyDeleteThanks for such an informative analysis.
ReplyDeleteGreat analysis as always!
ReplyDeleteVery helpful analysis, thank you for sharing!
ReplyDeleteTaking note of key levels to keep track and follow up.
ReplyDeleteSpot on analysis.
ReplyDelete