USD/CAD Tests Support After Retracement Pattern

Daily and 4H: The USD/CAD's rally attempt to test the 1.02 powerline was rejected today, with a big boost from the Canadian retail sales and inflation data, which all pointed to an economy that is starting to heat up.

MA orientations on both remind that the market is in bearish mode. The market tested the SMA50 in the 4H time-frame and there was clear resistance.

The stochastic shows bearish momentum - The daily showing a hold in the oversold zone, and the 4H shows the momentum staying bearish after a very short-term rally attempt.

1H: The 1H time-frame shows the dramatic decline in the near-term after the start of the US session. Note that the completed retracement rally was a zig zag with a 2-wave A structure and a 3-wave C structure.

The wave count is not clear to me here , but the structure suggests that the retracement rally is over, as price action clearly showed.

A break below 1.0070 spells the test of 1.00, and the strength of this morning's decline adds to this probability.

Capital Market Services, L.L.C.
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