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Weekly Trading Signal: USDCAD

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USDCAD: SELL

© Mike Hodges

The USDCAD market is currently determined to move southward as the analysis here shows. Following a medium term rally in the month of January 2013, the market began to drop last week – something that was serious enough to cause the price to move below the EMA 56 and closed under it. Around this time as well, the RSI period 14 crossed the level 50 to the downside and has remained like that till now. This is a Bearish Confirmation Pattern, and the signal is a ‘sell.’ Even under the EMA, it could be seen that the price consolidated to the downside (perpetually), while the price itself found it difficult to break the EMA to the upside. It would not be a lofty target for the price to attempt to reach the demand areas at 0.99000 and 0.98500 eventually. One thing is this, if there is an extant market bias, disguising as an equilibrium mode, then it would be assumed that the bias would continue and that any temporary correction would lead to a good entry price in favor of the current signal. There could be transient noises and masses’ reactions, including near-term biases. Whatever the case may be, it sounds logical to look for shorting opportunities on this pair.
Chart: 4 hour

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