USD/CAD Retraces the Entire Daily Bullish Channel Rally

Good morning,

USD traders have been riding the Janet Yellen wave, with the USDX consistently getting clobbered day after day since peaking at the turn of the new year.

Nowhere has this broad USD weakness been felt more than in USD/CAD. Just take a look at the daily chart below.

USD/CAD Daily:
170728_usdcad_daily
Click on chart to see a larger view.

That bullish channel was looking SO good for so long too… But as we know in trading, all good things must come to an end, and when that channel broke, boy has that end been a reality check for the US Dollar!

Price has dropped all the way down to now settle at the horizontal level that formed the very beginning of the channel. Yep, a full 100% retrace.

But now we’re here, could this be an opportunity to try and get long? Zoom into the intraday charts and lets have a look at what price action has been doing on the 30 minute chart below.

USD/CAD 30 Minute:
170728_usdcad_30minute
Click on chart to see a larger view.

The head and shoulders pattern isn’t my personal cup of tea, but it’s a pretty obvious inverted one that we have here. Price has bounced so sharply, that it hasn’t even been able to pull back into short term areas of previous resistance to turn into support!

Around this support level, USD/CAD is certainly in play. Mention @VantageFX on Twitter with how you intend to play the level from here.

So that’s another week of technical analysis in the books. Enjoy your couple of days off and I’ll see you back on the blog come Monday morning’s Asian session.

Best of probabilities to you!

Dane Williams – @VantageFX

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Source: Vantage FX Blog