As expected an early profit taking rally last week proved very limited with selling interest renewed below the key 13 day moving average. The result was a 3rd down week in a row, the most negative levels traded for 14 months and USDCAD tracking the lower end of bearish daily and weekly Keltner channels. The speed and scope of the decline means that signals for sentiment are oversold but while this may lead to an early reactive move, our studies are negative and we look for prices to continue to track the channels lower.
So, my view for this week is bearish at current 1.2665 levels and on any rally to 1.2748. The risk is 1.2876 with downside targets of 1.2555, 1.2460 and 1.2417.
3 Down Weeks
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