On beginning of May this year demand ruled on USDCAD and price reached 15-month high around 1.3740 area, and it may seem that further appreciation of USDCAD is only a matter of time.
However, this did not happen, and resistance of 1.3740 began a downward move, which culmination we watched last Friday. Then the key support at 1.3000 was broken, and worse, it was in a very bad style. Demand did not even attempt to rebound, which seemed to be almost certain on a such important support.
The consequences of breaking 1.3000 support
In the past week, USDCAD after breaking 1.3000 support found itself on 10 months lows and it will have further consequences. The nearest target for bears is support at 1.2840. After breaking it, another target will be 1.2690 and it can not be ruled out that this level will be the main target of the sellers.
During Monday’s session there may also be an attempt to push USDCAD over 1.3000 support. However success of such move is is currently unlikely. Corrective move in this case should end at 1.3000 level – which only would confirm downward trend that can be expected in subsequent sessions.
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