From a technical standpoint... the 1.34500 level was the first major level that most of the street had hoped to be play out as resistance turned to support. While it did not hold as support and price action broke right through it to the downside, it continued its role as resistance. On lower time frames price action can be seen kissing off the 1.34500 level and reversing to the downside sharply making a fresh new low. However that new low stopped abruptly... and it got us thinking... why? Looking at this analysis now you can see that price action stopped so abruptly where it did because it had kissed off the yellow . We are calling the yellow the medium length comparing it to the longer-term red , but the yellow is still extremely strong. For that reason we aren't comfortable taking any short positions on USDCAD until this yellow is broken. If broken, we can expect to see this pair make its way down to the next area of what should become resistance turned support, 1.28100. If price action makes its way down to that level... and it holds as support we may enter into a ranging market between 1.34500-1.28100.
Keep this analysis in mind when trading this pair guys... GOOD LUCK trading!
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