USDCAD New Swing Low (D)
Created on Wednesday, 13 April 2016 08:46
Written by Austin Galt
The USDCAD currency pair looks to have made a new swing low and I now believe an intermediate term bear rally is set to take place. Let’s check it out on the daily chart.
USDCAD DAILY CHART
The horizontal line denotes the previous swing low set in October 2015 at $1.2831. Price hit a low today at 1.2745 which may very well turn out to be the first new swing low.
This low looks to have set up a “three strikes and you’re out” low formation which is a common setup for low.
The Bollinger Bands show all bear rallies during the recent downtrend were stopped around the middle band and overcoming that band will be the first challenge for price.
I have drawn a Fibonacci Fan from the May 2015 low to January 2016 high and this low is right around support from the 76.4% angle. I favour this support to hold but if I’m wrong then the 88.6% angle may come into play.
The RSI and MACD indicator are both showing bullish divergences at this low.
I have added Fibonacci retracement levels of the move down and the first rally in a new bear trend often makes a deep retracement so I favour price to get back up to the 76.4% level which stands at $1.4232. The 61.8% level will also need to be watched and that level stands at $1.3948.
Summing up, I believe an intermediate term bear rally is now upon us or will be imminently.