USDCAD sold off another 200 pips today to close the day right above our target area of 1.345 at 1.352. Is this the end of the downtrend for the USDCAD pair? Let’s take a closer look as we compare various charts in correlation between WTI and USDCAD
As we mentioned in yesterdays posting that we could have looked for greater selling opportunity on any retracement back around the 38.2 fibonacci retracement or off of the hourly 21 ema. Any one who would of sold at this area would be in a 200 pip profit at the moment. Notice Stochastics and RSI are very low at the moment which shows the trend being over bought.
They say that history does nescessarily repeat itself but it rhymes, well looking at this Daily chart seems like we have a something to look forward to looking at the 150 ema (yellow). We could see price go back up to the 1.45 area and possibly be in that range for a while.
I have been talking about this for a week now, but if we do find price rejection by the end of tomorrow, we would like to see the weekly close with some kind of a long tail rejection bar above the 1.366 for a confirmation that the uptrend shall resume. Even though CAD is strong over most pairs at the moment, USD is also gaining strength and in my opinion it’s just a matter of time before they drive Oil prices down and regain strength over the CAD.
Oil has reached a resistance area and seems to have given us and hourly rejection candle. Will this be enough to push prices lower once again? Let’s see what’s gonna happen by the end of day or the month for that matter