USD/CAD continues fall to approach key support
James Chen, CMT July 14, 2016 9:51 PM
Aside from the BoC policy statement, also contributing to a higher Canadian dollar and lower USD/CAD has been crude oil, which has remained relatively well-supported despite having drifted down within the past month from early-June highs. Thursday saw a partial rebound for oil prices after the previous two days of volatile fluctuations.
Having currently approached the bottom support of the large triangle pattern, USD/CAD has reached a critical technical juncture. Any sustained breakdown below the lower border would confirm the triangle as a downtrend continuation pattern, indicating a potential resumption of the sharp bearish trend that started in the beginning of the year. Such a breakdown scenario would likely be contingent upon several different factors, including continued crude oil price support and continued skepticism over the pace of future U.S. rate hikes.
In the event of a breakdown below the triangle pattern, the next major downside target is at the key 1.2650 support level followed by the noted 1.2500 support level, which was last touched in early May and represents the low of this year’s bearish trend.
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