Price & Time: USD/CAD Back At Key Pivot Area
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- USD/CAD testing support confluence
- Next week key in terms of timing
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USD/CAD is testing the key support zone we highlighted earlier in the week. As a reminder the 1.2860/95 area marks a convergence of the 38% retracement of the May - September advance, the 5th square root relationship of the year’s high and the 127% extension of the late September advance. All of these things in their own right are probably important enough to warrant some attention, but their close proximity to each other suggests this should prove to be a pretty pivotal zone for USD/CAD in the near-term. A clear break below 1.2860 opens the door to another sharp move lower while a successful hold has the potential to elicit a pretty decent bounce.
Next week looks fairly significant from a timing perspective with Thursday & Friday really the key days in focus. As mentioned on Monday, there are some minor cyclical relationships at work today that could easily spur a bounce - especially with USD/CAD on key support. However, late next week looks to be the true test in terms of timing and should help answer whether this move off the long-term Fibonacci retracement at 1.3460 is just a relatively minor counter-trend setback or something more.
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.