USD/CAD is in correction mode on its uptrend.
Are buyers about to hop in at any of these levels soon?
Or is the pair in for a major reversal?
USD/CAD 4-hour Forex Chart by TV
This forex pair has been cruising higher for quite some time, with an ascending trend line connecting the lows since mid-August.
USD/CAD looks ready for another test of support, as it retreats from the highs near the 1.3700 handle.
Could this be a good opportunity to catch the rally?
The Fibonacci retracement tool shows levels where buyers might be hanging out. The 50% level, in particular, is closest to the trend line, the 1.3600 handle, and a former resistance zone that might hold as a floor.
A larger correction could reach the 61.8% Fib at 1.3566, but a break below this might mean that a reversal is in the works.
Technical indicators are still pointing to a continuation of the climb, though. The 100 SMA is above the 200 SMA to reflect the presence of bullish vibes, and the former coincides with the trend line to add to its strength as support.
Also, Stochastic is on the move down for now to indicate that the correction could keep going, but the oscillator is closing in on the oversold region to signal seller exhaustion soon.
If any of the Fibs hold as support, this forex pair could make its way back up to the swing high and beyond.
Just make sure you check out the average USD/CAD volatility if you’re trading this one!
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