Monday, February 19, 2018

The USD/CAD in a possible congestion zone

On the daily chart of the USD/CAD we can see that the pair has been consolidating between the 55 day EMA at the 1.2538 level and the 200 day EMA at the 1.2681 level. It is not unusual to see the price of an instrument consolidate between those two moving averages without taking a clear direction. The price of the USD/CAD may actually break in any direction, but for now the most probable price action is sideways. The stochastics indicator is showing us that the bullish momentum has come back and the USD/CAD may try to break above its 200 day EMA. In case of a bullish breakout, the USD/CAD may find its next resistance at the high on the 1.2920 level. In case the pair breaks below the 55 day EMA, then its next support could be the zone between the 1.2300 level and the 1.2244 level.

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