Trade of the Day: Trade of the Day: USD/CAD

By: Dima Chernovolov

USD/CAD continues fall inside the daily Down Channel chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of Down Channel at the 3-bar level – which is the result of the slow Initial Trend (4 bars) and above-average Uniformity (6 bars). USD/CAD is expected to fall further inside this Down Channel – in line with the earlier downward reversal from the resistance area shown below.

As can be seen from the daily USD/CAD chart below, the price earlier reversed down from the resistance area lying between the resistance level 1.2945 (former monthly low from November – acting as resistance after it was broken last month) and the 38.2% Fibonacci correction of the downward impulse from October. The proximity of this resistance area and the strong daily downtrend increase the probability USD/CAD will continue to fall inside this Down Channel.