As long as daily closing prices remain above that support, uptrend continuation should be expected.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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USD/CAD symbol on the MT4 platform
Key support levels: 1.3086, 1.3077
Key resistance levels: 1.3133, 1.3174
Looking at the short term price action, particularly on the 1H timeframe, USD/CAD broke above the massive resistance level at 1.3086. This resistance was the main obstacle to confirm the breakout of the downtrend trendline and 50 Exponential Moving Average. However, on September 3, price broke and closed above this resistance, suggesting further growth potential.
The correction down followed and was stopped at the previous resistance area, which now became the support. This support at 1.3086 is also confirmed by the 50 EMA and the uptrend trendline, making it extremely attractive for the short term buyers. Considering that the support is being rejected, the probability is highly in favor of the uptrend.
Therefore, as long as daily closing prices remain above that support, uptrend continuation should be expected. It can result in USD/CAD price growth towards the 1.3174 resistance confirmed by two Fibs. First is the 261.8% Fibs applied to the corrective wave down after breaking the 1.3086 resistance. The second is the 61.8% Fibs applied to the last wave up prior to the beginning of the downtrend.
While this could be the beginning of a strong uptrend, it might also be just one upside wave and it will be important to see the price action at 1.3174 resistance level when/if reached.