Daily Pivots: (S1) 1.3100; (P) 1.3196; (R1) 1.3275; More…
USD/CAD reaches as low as 1.3134 so far today and decline from 1.3598 extends. The break of 1.3080 completes a double top pattern (1.3588, 1.3598) and indicates reversal. This also supports our view that corrective rise from 1.2460 has completed. Fall from 1.3598 is seen as the third leg of the corrective pattern from 1.4689 and should target 1.2460 low next. On the upside, break of 1.3293 is needed to confirm completion of the fall from 1.3598. Otherwise, outlook will stay bearish in case of recovery.
In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg is like finished at 1.3598 too after hitting 50% retracement of 1.4689 to 1.2460 at 1.3575. Break of 1.3080 would now likely resume the fall from 1.4689 through 1.2460 to 50% retracement of 0.9406 to 1.4689 at 1.2048. We’d start to look for reversal signal below 1.2460 to complete the correction. In case of another rise, we’ll look for topping sign at 61.8% retracement of 1.4689 to 1.2460 at 1.3838.
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