USDCAD - Long (Correlation to AUDUSD trade)

FX:USDCAD   U.S. Dollar / Canadian Dollar
351 5 2
Based on a 1 month correlation, USDCAD             long seems to match the AU shorts. Bullish divergence is in play and once the correction to 1.252 level is done with, price should be heading higher.
Massive negative divergence on daily

On 4H, the last formation is a negative divergence on Stoch

is the USDCAD properly supported?! i think, around 1.23792 may be the strongest support. so iam still bearish. what do you think?
justatrader GriffinMuchina
The premise for this analysis comes from the basis that at the support 1.2425, there has been a bullish divergence formed. This also coincides with the median line rejection at this horizontal support.

Secondly, price broke out from the Upper median line. Of course, there is no such rule that price 'must or should' move higher on break out of the UML.

Then the rejection on break out (identified by the doji) is a sign of a retest of the break out from the median line, which also shows a confluence of a possible support at 1.2519/1.252.

Now, if price breaks this support and heads lower, it could mean a possible decline back to 1.2425, which is where the stops are and would signal the analysis invalidated. In such a case, we could then see a sharper decline possibly to the lower median line.

However, if the retest is successful at 1.2519, then no doubt we could see the first leg up to 1.2745 followed by 1.2816.
justatrader justatrader
Forgot to add that there's also the BoC interest rate decision this week. Expecting a hold on rates should be bullish for CAD. So it depends on the magnitude of the Cad's strength and the relative price movement in USDCAD before the BoC announcement.
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