Daily Pivots: (S1) 1.3238; (P) 1.3360; (R1) 1.3426; More…
USD/CAD’s pull back from 1.3534 accelerates to as low as 1.3282 so far. The strong break of 38.2% retracement of 1.3008 to 1.3534 at 1.3333 indicates deeper decline is underway. We’d expect strong support at 1.3211 cluster level (61.8% retracement at 1.3209) to contain downside and bring rebound. At this point, we’d still expect larger rise from 1.2460 to extend through 1.3598 resistance. However, sustained break of 1.3211 will dampen this view and target 1.2968 key support level next.
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, started from 1.2460, is likely still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. We’d look for reversal signal there to start the third leg. Break of 1.2968 wold at least bring at retest of 1.2460 low. However, sustained trading above 1.3838 would pave the way to retest 1.4689 high.
