USD/CAD: Is the Worst Over?
USD/CAD has had a very negative start to the year. For a while, CAD was actually the best performing currency in the world, year to date. But has the pair finished its down trend? Since Wednesday, there has been significant consolidation and a stop in the decline. It dropped as low as 1.31804 before climbing back up slightly.
I think given the significant level of 1.3200, which the pair has been testing around over the last 3 days, the down trend may be over. I would look for a slight retracement back towards the 1.3200 level before the pair reverses and begins a new up trend.
Going back a few weeks, this pattern is actually quite similar to the pattern formed from November 20 - November 28 2018. After an up trend (albeit a short one), the pair reversed and began a down trend, before hitting below the 1.3200 level. Once around that level though, it bounced back upwards, retraced back down to the level, and then broke out to the upside. I wonder if something similar will happen this time.
I would suggest placing a buy order on the retracement back to 1.3200 with a stop loss of 1.3160 and a take profit of 1.33144, a level of resistance multiple times since November 2018.
I think given the significant level of 1.3200, which the pair has been testing around over the last 3 days, the down trend may be over. I would look for a slight retracement back towards the 1.3200 level before the pair reverses and begins a new up trend.
Going back a few weeks, this pattern is actually quite similar to the pattern formed from November 20 - November 28 2018. After an up trend (albeit a short one), the pair reversed and began a down trend, before hitting below the 1.3200 level. Once around that level though, it bounced back upwards, retraced back down to the level, and then broke out to the upside. I wonder if something similar will happen this time.
I would suggest placing a buy order on the retracement back to 1.3200 with a stop loss of 1.3160 and a take profit of 1.33144, a level of resistance multiple times since November 2018.
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