USDCAD, 240 min

USDCAD broke below an important support in yesterday’s trading. The 1.3640 to 1.3660 area had supported price in January and then twice February. This has caused the pair to be oversold in both daily and 4h timeframes. The intraday sideways price action suggests that the pair could rally from the current levels towards the aforementioned resistance area which also coincides with 38.2% Fibonacci retracement level (levels left out of the chart to improve readability).

As the daily trend is still lower we are looking for short entry signals inside the Sell Area (1.3625-1.3730) with the target areas at 1.3540 – 1.3580 (T1) and 1.3436 – 1.3475 (T2).

Janne Muta

Chief Market Analyst

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USDCAD, Monthly

Looking at the longer term USDCAD chart (monthly) it is clear that prices have been in a very aggressive bull market for the last few years. The question going forward for traders is: when will this trend stop?

For the moment, the CAD continues to track the current oil price decline and since it is still unknown as to when the Oil sell-off will halt it’s decline, I’m not going to bet against the upward momentum of the USDCAD until clearer signs of a price reversal pop up.

Technically, USDCAD bullish momentum remains in overextended territory, in theory prices can remain overextended for very long periods, so I will discount the Stochastic for my monthly chart analysis and resort to the Fibonacci levels for price targets. The Fibo extension levels from March 2009 highs (1.3060) to the July 2011 low (0.94) price suggest that the current bullish momentum could take the USDCAD towards the 1.5280 (161.8% Fibo).

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.