USD/CAD:False breakout of downtrend line, turning back

Sep 13 , 2018

 

By observing the daily technical chart we can see that earlier pair was making successively lower lows and lower highs by taking the balanced demand and supply from the downtrend channel.  But in last week pair has given the breakout of the donwtrend line and it bounced to north side with a big bullish marabuzo candlestick but it could not sustain at that level and it reversed to south side with the formation of two consecutive marabuzo candlestick. The breakout of downtrend line has considered as false breakout.

 

 

The way bears are twisted back to south side it looks like they are in mood to provide the breakout of 1.2909 level in short term. A daily closing below this level will give us further bearish signal and it may test the 1.2500 level which is a key support level from intermedite term point of view. Odds are in favor of bears and intraday bias remains bearish on the pair as long as 1.3120 level.

 

 

 

 

From psychological point of view we can observe that the last week’s movement was completely bull trap, if any trader of investors traped into it just exit with a small loos . The RSI is also favoring the bears from negative territory and providing us bearish sentiments MACD indicator is also generating bearish signal with the help of bearish crossover. The 1.2900 level is the key support level followed by 1.2850 level where as 1.3250 level is the key resistance level followed by 1.3350.

 

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