Technical Analysis - USDCAD breakdown for H4/D1 and bullish correction for W1/MN1
We have been suspicious of the action in USDCAD since the dramatic reversal on the FOMC decision last month. It was one of the widest daily ranges in years on some of the highest volume in years. A textbook sign of exhaustion – especially after just seeking out a new high. Our fears were realized yesterday as the February lows were breached leading to another high volume liquidation. We can only assume that this decline has more to run given the clear potential overhang of “stale longs” after several weeks of range trade. Another interpretation of the price action is that a head & shoulders pattern has been triggered on the move through 1.2450. If this is the case, it could open the way for a move to 1.2000. We shall see. It is USDCAD after all and a curve ball or two is the rule not the exception. Immediate resistance is seen at 1.2350 and 1.2450, but only a move over 1.2665 would turn the technical outlook positive.
Trend:
- H4 - bearish
- D1 - bearish
- W1 - bullish correction
- MN1 - bullish correction
