A rejection at the top is formed at 1.2906 in USD/CAD and intraday bias has turned neutral first. With the 1.2906 resistance intact, further decline is expected. A decisive break of 1.2829 will target at 1.2759 next. However, a break of 1.2906 will dampen our bearish view and turn bias back to the upside for 1.2936 instead.
Looking at the bigger picture, current development argues that USD/CAD has defended 1.2906. And with 1.2906 intact, we’d favor the case that a fall from this levels must be seen as a correction. A break of 1.2829 will further affirm this bearish case. That is, a larger decline from 1.2906 is not completed. However, on the other hand, a firm break of 1.2829 will indicate further downside in coming sessions to be seen.
The recent run higher on the greenback has been incredible. A huge accelerating bull run has seen the market burst through the key until now. The market has been limited by the resistance band 1.2906 on numerous occasions in the past candles but the dollar has lost its momentum and driven a breakout. Staying with the bull run may be the risk in the very near term, however, if profit takes hits, it could be a sharp reversal.
On the oscillator, it is also notable that the entirety of today’s session took place outside the 80.0 standard deviations. The bulls were looking tired before the sharp gains, but again the move looks stretched and a close back inside the 80 levels would now be a corrective signal. A move back below 80 on the four hours would now be a corrective signal that a closing level back inside the levels.
The four hourly chart support turned resistance around the breakout at 1.2829.The USDCAD pair returns to test the bearish channel’s resistance after leaning on the intraday bullish support line that appears on four hour chart, accompanied by stochastic reach to the overbought areas, waiting to motivate the price to rebound bearishly to break 1.2829 level and active the negative effect of the bearish pattern formed by the mentioned intraday channel followed by pushing the price to continue the main bearish trend.
Therefore, we believe that the chances are valid to trade negatively in the upcoming period conditioned by the price stability below 1.2829, reminding you that our main targets begin at 1.2759 and extend to 1.2703.
The expected trading range for today is between 1.2835 resistance and 1.2732 support.
Expected trend for today: Bearish
For more detailed analysis from the author, please visit NoaFX.
This article was originally posted on FX Empire
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