I spy with my eye a couple of hesitation candlesticks near the 1.2600 psychological handle!
As you can see, 1.2600 is also around the 200 SMA and a channel resistance that USD/CAD bulls have been bowing to since late January.
Dollar bears can start loading up them short positions as soon as USD/CAD fails to break above the 1.2600 zone. 1.2500 is a good area to target though you can also aim for 1.2380 if you think that the Greenback will go back to its mid-March lows against the Loonie.
Meanwhile, dollar bulls will have to wait for a clear break above the channel and 200 SMA resistance levels. If USD/CAD does break higher, though, then you’ll want to eye the 1.2700 March highs as initial targets.
What makes the setup more interesting today is that the current bullish momentum could take the euro above the 1.5670 March highs. This would mark a double bottom breakout that could push EUR/CAD to the 100 SMA area!
Euro bulls who are confident that the current upswing would lead to a longer-term reversal for EUR/CAD can buy at current levels and then lighten or bail as soon as the pair hits resistance at the double bottom “neckline” or the 1.5850 zone near the 100 SMA.
If you believe that the “breakout” above the trend line resistance is just a fakeout, however, then you can watch them candlesticks for the first signs of hesitation and start placing short orders once you see downside momentum.
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