Currently USD/CAD is trading near the 1.2860 level where the pair found the support previously, and now a potential double bottom is forming. Everything is pointing to a strong support.
The Fibonacci applied to the channel breakout point shows
that the price is rejecting the 0% Fibs level, which is the final downside target.
At the same time 261.8% (S1) of the Fibs applied to the first corrective wave after
the channel’s breakout is right at the same level and is also being rejected. Besides, the price is right at the previously formed low and finally
the RSI oscillator is forming a bullish divergence.
Everything is in favor of a potential reversal, and a
correction up might follow. Consider buying USD/CAD while the price is near S1
(1.2850), targeting one of the resistance levels with the R5 (1.3100) being
the final target. Alternatively consider a stop and reverse if the price manages to
get below 1.2840 as this could trigger another wave down to test 361.8% Fibs
level – S2 (1.2785)
Support: 1.2850, 1.2785
Resistance: 1.2930, 1.2980, 1.3015, 1.3055,
The material has been provided by InstaForex Company – www.instaforex.com