USD/CAD bounces off a key long-term resistance
|We’ve spotted a great selling opportunity on the USDCAD and it’s a great occasion for both the mid and long-term. First, let me show you the big picture and the handsome price action that can be seen on a weekly chart.
So, the main thing on the weekly chart is that the price is in a long-term down-trend. Most recently, we were in the bullish correction but it doesn’t change the long-term mood. A correction managed to test a key resistance on a psychological barrier of 1.3 (yellow). It was a crucial level for the past four years and it is still crucial now.
1.3 is additionally in the same place as the 38,2 % Fibonacci, which only strengthens this area. USDCAD tested that resistance twice and both of those times were unsuccessful. That creates a double top formation.
Interestingly, if we look closer, the second top is in the same time a smaller Head and Shoulders pattern! This pattern is already up and running as the USDCAD managed to break its neckline. With this, we have a sell signal on both time horizons: mid-term and the long-term. A potential target is on the 23,6% Fibo and the lower line of the wedge. With all that, chances that we will get there are quite high.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.