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Forex technical analysis: USDCAD break outside box

Discussion in 'Technical Analysis' started by ForexLive, Oct 6, 2015.

  1. ForexLive

    ForexLive Forum Member

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    The USDCAD has trended lower into the London session, accelerating the trend to the downside in the process. Looking at the 5 minute chart below, the price fell below lower trend line support, stops was triggered and a new low at 1.3063 was reached. Since bottoming, however, the pair has moved back above the broken trend line and has moved toward the 100 bar MA (blue line), retracement levels and topside channel trend line.

    The corrective move higher also stalled just below the Asian session lows at the 1.3127 level though. Sellers in control.. As mentioned, this area also corresponds with the 200 bar moving average on the 5 minute chart (the trend lower has been using that as resistance on tests) and a channel trend line off the more established lower line.

    The sellers are more in control, but the price action is a little more two-way at this area. On this chart the lower trend line - which was broken earlier needs to be re-broken at the 1.3075 area. Get below and the buyers will be feeling more pain and the sellers will also feel more confident.

    Looking at the daily chart, the pair has pushed below the trend line connecting the low from June to the low from September. On Friday that line was tested and held but it was at the close. Today the price broke below that line. That is a bearish development.

    The low from early September comes in at 1 3105. Most of the activity within September traded between that 1 3105 level up to 1 3349.. There was an extension last week above the high. There was an extension below the 1 3105 level in mid-September. If the buyers are to take back control. Keep an eye on the 1 3105 level as a close risk level to stay below.

    Read full forex technical analysis here...
     

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