USDCAD:- Retesting A Critical Level
USDCAD:- The price did break past our suggested target of 1.2400 and has since carried on a further 150 + pips going on to retest the lower zone that price previously broke at 1.26650. Watching the price carefully we can see how we had a violent rejection having retested this price point. The only concern I have with the shooting star is that it formed on a Friday and this can often be manipulative or profit taking at the end of the week. The weekly closure was a strong bullish candle suggesting we may see a further push to the upside with the monthly resistance at 1.28000 an upside target to consider. This is the first time a weekly candlestick has closed above the Moving averages in 8 weeks and may be the first sign of a slight recovery on the USD after being dumped soo hard in previous weeks.
There are high impact data releases on Wednesday that may, in turn, be a catalyst for the price to continue it its surge. The 1.26650 will hold key to the next leg of the journey if the pair failed to break and close back above this current resistance it will have the potential to complete a fib reversal move to the downside. For now, we need to watch for a break or bounce of this level to consider the next trading set up.
Previous:- Following from our previous analysis the pair did in fact decline and reach the suggested target region of 1.2300. We have yet to see the continuation of the monthly support area of 1.2200. For now, the US Dollar has declined a significant amount in a short period of time with last weeks candle closure being extremely bearish. I would expect to see a further continuation in the medium term. For now, the price has made a low at 1.22800 and has since consolidated and squeezed higher. We may see a slight retracement or a push back towards the previous area of lows around 1.24000. This will act as a critical barrier for the pair.
The price will either bounce or break through this level and will determine what next upside or downside target may occur. Following the trending direction, we could expect the pair to continue its momentum to the downside Having completed the most recent Fibonacci move we could potentially see a new retracement wave from the last swing high at 1.2500 in the region of 1.24000.
I will be eagerly anticipating this region as I believe it would hold the key to a bounce and continuation to the downside, or a break above and a further of 100 pips rally to the upside.