The US dollar has been enjoying a rally against most major currencies particularly the past few days. However against the Canadian dollar it may be up to some resistance. Fibonacci retracement lines from the last CAD rally show a retracement touching the 61.8% line with today’s price action. That is a particularly strong resistance level, also coinciding with the upside of the Ichimoku cloud and would have to be broken by a couple of closes above both for the rally to continue. Add the that the ADX and especially the oscillator are showing signs of overbought and there could be room for the USDCAD to retrace back toward the first support at the 38.2% line, which also coincides with the bottom side of the cloud. Add the double top and umbrella on the 4 hr chart and this might be perfect timing for this pair to come back down again tomorrow.

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