Buy USD/CAD at 1.3400. Stop at 1.3360 and Target at 1.3485
For the past few trading days, while price was declining to the low, MACD has not been following price in making new lows. This divergence warning is a sign of a possible price low in the process of forming. In the last 2 candlesticks on the 4-hourly chart, we saw a large green candlestick that broke above a resistance point at 1.3400. Is this the signal of a bottom in place?
If price can stay above 1.3380, we see price going higher to at least Fibonacci 38% at 1.3450. Ideally, price should move to Fibonacci 50% at 1.3487. This will be a more difficult level to push through as there is another previous support turned into resistance at 1.3495
Stochastic has a bullish crossover and is moving higher away from the oversold zone. Stochastic has divergence warning as well. MACD has given a couple of divergence warnings and the fast line has already cross over into the bullish zone. Both momentum indicators are hinting of higher prices ahead.