In a previous analysis we expected USDCAD to pull back towards trend line support between 1.33-1.3250. Price did exactly this and pulled back towards our support area. At that point in time we said that a bounce is highly likely but bulls do not want to see price break below 1.3250.
Red line - trend line support
Black lines -Fibonacci retracement levels
Our warning for 1.3250 was justified. Price broke below the 38% Fibonacci retracement level and the upward sloping support trend line. Price is now more than 100 pips lower trading at 1.3138 below the 61.8% Fibonacci retracement. Unless price makes a higher low relative to the 1.30 low, then October could see price below 1.29. Resistance is found at 1.3330. Price has started making lower lows and lower highs. This could unfold into a bigger move lower if it continues.
