At the end of trading on Friday, a very interesting pattern emerged in the USD/CAD daily price chart. A possible head and shoulders bottom has emerged.
The USD/CAD has suffered a sharp selloff over the previous few months with the cross currency moving from near parity to of about .945.
The clear head-and-shoulders bottom pattern, labelled below, will need to be monitored this week. There is some significant resistance at the current level at around 0.972 shown by the first blue resistance line. Should the USD/CAD break this point, we will be looking to enter long with the next resistance level at around about .984. If the cross currency can move to this point, significant profits can be locked in.
Examination of the 15 minute price chart shows that the USD/CAD tested the 0.972 price point near the close of trading before retreating back to .9685. In this particular cross currency, the 15 minute chart will help provide the earliest indication that the resistance at 0.972 price point is penetrated.
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