- Stop loss 1.3218
- Entry level 1.3106
- First Target at 1.2950
- Next targets to test at 1.2854, 1.2777
USD/CAD deeper decline is still expected as long as 1.3100 resistances hold. At this point, such decline is viewed as a correction to the market for USD/CAD pair. Thus, we’d expect strong resistance around long term at 1.3100 to contain downside. Meanwhile above 1.3218 will turn bias back to the upside.
In the bigger picture, current development suggests that a medium term downside is already taken place and a deeper correction could be seen possibly at 1.2854 levels. There is a clear indication of trend reversal with back to back two bar rejection which closed below the resistance, suggesting a shift in the momentum. Focus will be on the structure on the current fall from current levels. We expect strong resistance at current levels to break at 1.3106 confirming a bearish move on pair. The fall from these levels should test 1.2950 and would extend to 1.2854 and later to 1.2777 minor support areas. Meanwhile, above 1.3218 should extend the upward bias which shall dampen our short term view. Outlook remains bearish for week.
- NAHB Housing Market Index, Housing starts, Building Permits
- Consumer price Index, EIA crude oil Stock Change with FOMC Minutes
- FOMC Williams Speech with Initial Jobless Claims followed by Existing Home sales for US
- Wholesale Sales for Canada
- Consumer price Index, Bank of Canada Consumer Index
- Retails sales with Ex Auto sales
Area of Interest
- Strong resistance at 1.3100 areas decline from current levels.
- Bearish pattern confirmed with back to back two bar reversal at resistance levels.
- Pair broke the trend line and closed below the trend line retesting the area.
- Key area to target to the downside bias shall be at 1.2910 Levels.
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