The Canadian dollar has been growing in strength recently, yet the greenback bulls staged a rebound recently. Just a pause in the previous trend, or a change in gears looms?
Although USD/CAD moved below the black support line based on the previous lows that also forms the neck line of the potential head-and-shoulders formation, the deterioration proved only temporary. The exchange rate rebounded on Friday, invalidating not only the earlier breakdown below the black line, but also below the previously broken green support zone that is based on the early-November lows.
Additionally, the CCI joined the Stochastic Oscillator in generating its buy signal, suggesting that higher values of USD/CAD may be just around the corner.
Such price action will be more likely and reliable though only if the pair succeeds in breaking above the upper border of the blue consolidation.
Should the bulls be strong enough to close today or one of the following days above this resistance, we’ll consider opening long positions.