FX.co ★ Technical analysis of USD/CAD for January 27, 2015

General overview for 27/01/2015 08:45 CET

The recent price action to the upside is rather choppy and does not look like a typical impulsive wave, but this kind of wave development might be a part of a structure called Ending Diagonal. The other clue comes from the bearish divergence between the price and momentum, that is diminishing as the price makes higher highs. That kind of market behavior might suggest that a local top for this market is near and any breakout below the level of 1.2309 would be first confirmation of this possibility.

Support/Resistance:

1.2496 - Swing High

1.2320 - Weekly Pivot

1.2309 - Intraday Support

1.2181 - WS1

Trading recommendations:

As long as the price stays above the level of 1.2309, choppy trading conditions are expected and daytraders should consider opening only a buy orders with SL just below this level, using any scalping strategy to gain 20-30 pips. Please, watch the golden channel breakout for a possible short trade opportunity if the level of 1.2400 is clearly violated.