Trade of the Day: USD/CAD

By: Dima Chernovolov

USD/CAD continues to rise inside the daily Inverse Head and Shoulders chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of this chart pattern at the 6-bar level – which is the result of the strong Initial Trend (8 bars), lower Uniformity (4 bars) and medium Clarity (5 bars). USD/CAD is expected to continue to rise toward the “neckline” of this chart pattern.

As can be seen from the daily USD/CAD chart below – the pair earlier broke through the resistance area lying between the resistance level 1.2600 (which earlier reversed the pair at the end of July) and the 50% Fibonacci correction of the sharp downward correction from last month. This price area is acting as the support zone after it was broken. The proximity of this support area adds to the probability USD/CAD will continue to rise toward the “neckline” of this Inverse Head and Shoulders chart pattern.