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Fan Yang

Waiting for USD/CAD to Complete an ABC Correction

USD/CAD is bearish in the short-term, and has strong momentum to the downside to start the week. Price action is very heavy as we can see in the 4H chart, and we should expect some further slide, perhaps into the 1.28-1.2850 support pivot area .

USD/CAD 4H Chart 6/6

(click to enlarge)

The 4H chart shows that USD/CAD has been bullish since May, started to retreat before hitting 1.32. The latest dip came about after the epic miss of Friday's US NFP report.

Now in the short-term, price action is heavy. But I would respect that May rally. I would look for further short-term decline, but look for support as price approaches 1.28. There is also a support pivot at 1.2835 and another support/resistance pivot below, at 1.2750. 

This huge area 1.2750-1.2835 represents a critical pivot area. If USD/CAD has indeed turned bullish in May, it should find buyers in this range. 

I would look for price to stall after an ABC pattern, perhaps form a price bottom in the 1H chart. Also, I would look for a bullish divergence between the 4H price chart and the RSI. 

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