Since November 4, the Canadian dollar has been testing the strength of the 200 EMA. This is a strong resistance level. If the pair manages to consolidate below this zone, a downward movement could occur towards the bottom of the uptrend channel located at 1.24. A sharp break to this trend line could accelerate the decline to 1/8 of a murray around 1.2329.
We should also look at the SMA of 21 located at 1.2425, which is giving support to the pair. If in the next few hours USD/CAD closes below this moving average, there will be a double confirmation of a bearish signal.
On the contrary, if the loonie remains above 1.2473, above the 200 EMA, it could be a sign of a upward reversal so that the price could reach 3/8 of a murray around 1.2573, above the psychological level of 1.25.
The eagle indicator is showing an overbought signal. We could wait for a correction before the uptrend can resume. Therefore, as long as USD/CAD remains below 1.2461 (EMA 200), we can sell with targets up to 1.2329 (1/8).
The market sentiment report for today November 8 shows that there are 72.26% of operators who are buying the Canadian dollar. This is a positive sign and we could expect a downward movement that could push USD/CAD to 1.2329 in the next days.
Our trading plan for the next few hours is the following. Only if USD / CAD is below 2/8 of Murray, we will selling opportunity with targets up to 1.2400. In this area, we must wait for a sharp break in the bullish channel to be able to continue selling until 1.2329 . On the contrary, if the loonie consolidates above 1.2461, we should avoid selling, which could mean a new bullish wave.
Support and Resistance Levels for November 08 - 09, 2021
Resistance (3) 1.2554
Resistance (2) 1.2498
Resistance (1) 1.2476
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Support (1) 1.2427
Support (2) 1.2388
Support (3) 1.2376
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A trading tip for USD/CAD for November 08 - 09, 2021
Sell below 1.2461 (EMA 200) with take profit at 1.2400 and 1.2329 (SMA 21), stop loss above 1.2495.
The material has been provided by InstaForex Company - www.instaforex.com