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Morning Market Update – USD/CAD

By:
Sylvester Stephen
Published: Sep 15, 2017, 07:49 UTC

USD/CAD is losing some downside momentum as seen in the four hour chart. But still, with the 1.2214 minor resistance intact, intraday bias stays on the

Morning Market Update – USD/CAD

USD/CAD is losing some downside momentum as seen in the four hour chart. But still, with the 1.2214 minor resistance intact, intraday bias stays on the downside. Current decline from 1.2214 is expected to continue and target the next long term level at 1.2109. On the upside, above 1.2214 the pair will turn its focus back to 1.2240. A break there will be the first sign of near term reversal.

In the bigger picture, price actions from 1.2214 medium term top are seen as a correction pattern. Such corrective fall is expected to extend to 1.2109. At this point, we’d look for strong support from there to contain the downside and bring rebound. Break of 1.2109 will indicate continuation of the downside momentum and turn the outlook bearish further for the 1.2078 key support area. However, a sustained break of 1.2078 will carry larger bearish implications and bring deeper decline.

The dollar remains under pressure as the market continues to fall away. The down days seem to continue by strong bear candles, whilst any recovery up days are beset with struggles to make any headway and turn into consolidation days. The recent candle was another decline indication in the day where the bears have come back to make any sustainable impact, before once more resuming the decline overnight. The daily momentum indicators have all now taken on a corrective outlook, with the Stochastics falling below 80 having crossed lower. The pair is now back into the old pivot band 1.2146 so it will be interesting to see the reaction. The likelihood is that the 1.2146 support which has often been seen as an inflection point will now be tested.

The four hourly chart shows the resistance at 1.2214 is bolstered now as a key level, with 1.2109 initially an area of near term overhead supply. The USD/CAD pair continues to decline strongly to approach from the psychological barrier 1.2100, moving inside the bearish channel that appears on the four hour chart, which its support line located at 1.2109, forming ournext main target.

Therefore, we believe that the way is open to achieve more decline in the upcoming period, supported by the negative pressure formed by the EMA50, noting that holding below 1.2214 represents the first protecting factor to the continuation of the expected decline.

Expected trading range for today is between 1.2078 support and 1.2222 resistance.

Expected trend for today: Bearish

 
For more detailed analysis from the author, please visit NoaFX.

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