Just How Much Downside Is Left In The USD/CAD?

The Canadian dollar has been growing in strength recently, yet the greenback bulls staged a rebound recently. Just a pause in the previous trend, or a change in gears looms?

Although USD/CAD moved below the black support line based on the previous lows that also forms the neck line of the potential head-and-shoulders formation, the deterioration proved only temporary. The exchange rate rebounded on Friday, invalidating not only the earlier breakdown below the black line, but also below the previously broken green support zone that is based on the early-November lows.

Additionally, the CCI joined the Stochastic Oscillator in generating its buy signal, suggesting that higher values of USD/CAD may be just around the corner.

Such price action will be more likely and reliable though only if the pair succeeds in breaking above the upper border of the blue consolidation.

Should the bulls be strong enough to close today or one of the following days above this resistance, we’ll consider opening long positions.

We hope you enjoyed reading the above free analysis, and we encourage you to read today's Forex Trading Alert - this analysis' full version. There, we discuss also the current situation in EUR/USD and AUD/USD. The full Alert includes more details about our current positions and levels to watch before deciding to open any new ones or where to close existing ones. There's no risk in subscribing right away, because there's a 30-day money back guarantee for all our products, so we encourage you to subscribe today.

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Nadia Simmons

Forex & Oil Trading Strategist

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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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