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USDCAD has been bouncing between horizontal resistance and an upward trendline support. Most recently we have seen a rejection of the horizontal resistance that is now acting as a strong Supply Zone leading to a strong move down, followed by a small bounce off the upward trendline support.
This upward trendline support and the low of last week are going to be the key areas to watch to see if price is going to continue the downward trend that was initiated with the Supply Zone rejection over the Christmas period. A break below these levels would signal a further drop to the next significant level of support. CAD and USD are clearly heading in different directions at the moment, not only against each other but against the basket of major currencies, with average RSI for CAD vs the other 5 majors near 60, and USD near 42.
On the bullish side, price tested the upward support trendline twice at the backend of last week and gave us some big wicks on the daily showing the buyers rejection of that area. Monday so far has seen another drop heading back to the trendline, but a reversal here and break above Friday's high would show a clear change in sentiment and create a potential long opportunity.
Let me know your thoughts in the comments below!
USDCAD has been bouncing between horizontal resistance and an upward trendline support. Most recently we have seen a rejection of the horizontal resistance that is now acting as a strong Supply Zone leading to a strong move down, followed by a small bounce off the upward trendline support.
This upward trendline support and the low of last week are going to be the key areas to watch to see if price is going to continue the downward trend that was initiated with the Supply Zone rejection over the Christmas period. A break below these levels would signal a further drop to the next significant level of support. CAD and USD are clearly heading in different directions at the moment, not only against each other but against the basket of major currencies, with average RSI for CAD vs the other 5 majors near 60, and USD near 42.
On the bullish side, price tested the upward support trendline twice at the backend of last week and gave us some big wicks on the daily showing the buyers rejection of that area. Monday so far has seen another drop heading back to the trendline, but a reversal here and break above Friday's high would show a clear change in sentiment and create a potential long opportunity.
Let me know your thoughts in the comments below!
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