Popular loonie over the last months have been moving in a broad consolidation in orange-marked S/R zones, further supported by the Fibonacci abolitions (measured from declines of over 2000 pips in 2016). At present price returns to the mentioned side movement.
Golden ratio stopped dollar bulls
Breaking the upper limit of consolidation occurred already in April. Price after reflection from the top came under 61.8% of the abolition (1.37910) and rebounded to the south. Friday’s strong depreciation of USD/CAD brought price again to horizontal channel, simultaneously breaking Fibonacci 50% and March 1.3530:
The above-mentioned levels will play a key role in successive sessions, and with high probability will help us to decide to open a short position, aiming at lower limit of consolidation, which is almost 500 pips lower than the current price. D1 chart at this point forms a pin bar under resistance – if session closes in that form, we will receive a signal to enter short.
Traders using lower entry intervals may look at the H4 and H1 charts, but for now there are no interesting signals.