What is happening to Canadian Dollar?

FX:USDCAD   U.S. Dollar/Canadian Dollar
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Our previous analysis was pointing to a probable Trend turning point at around 1.33 range. Obviously we realized the target but the price did not bounce back and kept on falling, even though technically there was all kinds of indications that it might bounce back at this level. This is how the markets behave. It does sometimes exactly the reverse of your expectations. Now, what happened yesterday? FEDs Yellen announced only 2 rate hikes as opposed to 4 that everyone was expecting. That was enough to cause speculators to run on high gear. Within minutes the price pierced through a significant Resistance zone . Traders shall always be ready for these type of news. It could be a war breaking out somewhere or an announcement from the governments or the periodical rate announcements can change the overall picture and nullify expectations.
Coming back to our analysis, I would say the next Support target is 1.28 range. We have a very strong support cluster at this point. On the chart the blue dotted line represents a weekly support and the red dotted line represents a daily strong support line (at 1.28 levels). I would expect a retrace back to this level. Then again we need to be patient and let the market build some confidence (thus market patterns that we can read). The good think is that our ABC pattern still holds and is still pretty much valid. I expect the price to go down all the way to 1.28 levels and start lingering there for some time (no one can know how long) and then once there is enough confidence, I expect a serious bounce back possibly to the same high levels that we have seen before. Bear in mind that this is a long term expectation. Good Trades.
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