Guest Commentary: MarketVisionTV.com - USDCAD Grinding out a Base
The erratic downside ratchet for the Dollar continues from the the last interim 1.0160 high. As each leg of this decline to the upside and the downside has developed in a 3 wave format, we suspect a Diagonal wedge pattern best defines the price action. The A leg would be complete with the drop to 1.0050 and the B wave with the erratic rally to fail 1.0160. The strongest part of the decline or C wave finished with the test of interim 99.60 support to prompt the messy D wave consolidation back to 1.0035. That suggests the terminal leg of this pattern or E wave will take a 3 wave structure of which we are probably ending the first leg or minor A wave with the dip to 99.30. As upside reactions fail 1.0000 down channel resistance expect a full test of 98.90 medium term consolidation support possibly as a flat bottom triangle. However, the market must regain 1.0035-1.0070 resistance to secure this larger range trade. Below 98.90 may well inject downside momentum to a secondary 97.60 target.
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By Don Haines, MarketVisionTV.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.