On the daily chart, the price has reached and rejected the key psychological price area near 1.3000, after which it went up and broke above the downtrend trendline. Such price action suggests further upside correctional move which might result in the price rising towards one of the Fibonacci resistance levels.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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Analysis Details:
USD/CAD symbol on the MT4 platform
Type: Bullish
Key support levels: 1.3118, 1.3000
Key resistance levels: 1.3200, 1.3258
On the daily chart, the price has reached and rejected the key psychological price area near 1.3000, after which it went up and broke above the downtrend trendline. Such price action suggests further upside correctional move which might result in the price rising towards one of the Fibonacci resistance levels.
The first resistance is located at 1.3389, which is 23.6% Fibs applied to the overall downtrend. This level corresponds to the average-price downtrend trendline as well as the 200 Exponential Moving Average, implying that this resistance could be tested within the next few weeks. The second resistance is located at 1.3628 and corresponds with two Fibs. The first is 38.2% of the overall downside move and the second is 88.6% Fibs of the last downside wave.
On the 4-hour chart, we can see a potential formation of the reversed head and shoulders patterns. Currently, the price is stuck between the 1.3133 support and 1.3200 resistance areas. Perhaps this might suggest the continuation of the range-trading phase for the time being. Therefore, the final confirmation of the upside move could be a daily break and close above the previously established high at 1.3258.
The downside risk will increase substantially only if the daily closing price will be printed below the recent low at 1.3118. However, spikes below this level can be expected before/if price will move up.
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