This is my analysis for the coming few weeks for USDCAD.
Currently USDCAD is in a solid symmetric Parallel Channel with a potential of forming another AB=CD pattern ending at the extreme high of the Channel @ 1.38687
When we look back at the last month of 2015 until Feb 2016, there is an interesting area of buyers and sellers getting caught in what had looked like a great opportunity to short (Blue box) and what had looked like an opportunity to buy (green box).
Looking at the RSI indicator, the first over bought (OB #1) invited counter-traders to short, however, they were trapped in the market and possibly stopped out as it rallied up.
The second over bought (OB #2) fell hard into the previous zone where counter-traders were once again trapped in the market.
My 3 scenarios of the next potential move (please refer below):
1. As Dollar index (DXY) is reaching a minor resistance zone, we could potential see USDCAD reversing inline with DXY at a minor resistance zone as well.
2. USDCAD goes into the PRZ which was also the trap zone and reverses at the extreme of the Parallel Channel as it also completes the D leg of the AB=CD pattern.
3. USDCAD goes into the PRZ and completes D leg of AB=CD pattern, goes back down then reverse and rallies up into the 13 year high zone.
I will be watching price actions and look for signals for entry.
Let’s see how the market unfolds.
** Feel free to Like or Comment - welcome all criticism
Currently USDCAD is in a solid symmetric Parallel Channel with a potential of forming another AB=CD pattern ending at the extreme high of the Channel @ 1.38687
When we look back at the last month of 2015 until Feb 2016, there is an interesting area of buyers and sellers getting caught in what had looked like a great opportunity to short (Blue box) and what had looked like an opportunity to buy (green box).
Looking at the RSI indicator, the first over bought (OB #1) invited counter-traders to short, however, they were trapped in the market and possibly stopped out as it rallied up.
The second over bought (OB #2) fell hard into the previous zone where counter-traders were once again trapped in the market.
My 3 scenarios of the next potential move (please refer below):
1. As Dollar index (DXY) is reaching a minor resistance zone, we could potential see USDCAD reversing inline with DXY at a minor resistance zone as well.
2. USDCAD goes into the PRZ which was also the trap zone and reverses at the extreme of the Parallel Channel as it also completes the D leg of the AB=CD pattern.
3. USDCAD goes into the PRZ and completes D leg of AB=CD pattern, goes back down then reverse and rallies up into the 13 year high zone.
I will be watching price actions and look for signals for entry.
Let’s see how the market unfolds.
** Feel free to Like or Comment - welcome all criticism
Comment:
Looks like this pair went with scenario 1