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Market Analysis

USDCAD Approaching Its Support, Prepare For A Bounce

June 01, 2018
BY Emma Richards

USDCAD approaching its major support, we expect to see a bounce.

Buy above 1.2735. Stop loss at 1.2681. Take profit at 1.2938.

Reason for the trading strategy (technically):

Price bounced nicely off its major support at 1.2735 (61.8% Fibonacci extension, 61.8% Fibonacci extension, 61.8% Fibonacci retracement, horizontal overlap support) where we see it rising to its resistance at 1.2938 (61.8% Fibonacci extension, 50% Fibonacci retracement, horizontal swing high resistance). We do have to be cautious of the intermediate resistance at 1.2836 (100% Fibonacci extension, 23.6% Fibonacci retracement, horizontal overlap resistance).
Stochastic (89, 5, 3) made a corresponding bounce off its support at 3.8%. We have also identified a bullish divergence with price which contributes to our bullish bias.

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