Putting USDCAD short-term and long-term charts in perspective
Looking at the monthly chart above we can see that the instrument reversed earlier from a 1.3000 level and is breaking above the key resistance now a falling downtrend channel resistance line 1.3400 level for a possible upside continuation into the 1.4200 level.
For some traders which are not using the top-down trading analysis, the problem is arising when they look at the weekly chart and they are intrigued by the latest test of the 61.8% Fibonacci retracement of the strong downside swing 1.3680 level. Some see this as a possible rejection for the pullback lower into 1.3180 level. A daily close below the 1.3600 will completely invalidate the upside extension and it could lead to a greater downside pullback into 1.3400.Â
A Daily chart is revealing the possible hold here and a greater probability for the short trade entry pullback. A daily close above the 1.3686 would give a long trade entry greater probability.
The main conclusion of this technical analysis insight is that in the medium-term USDCAD will have a higher probability to swing lower and the invalidation of this swing lower will come only on a daily close above the 1.3680 level.
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