Dollar/CAD dipped under 1.25 and is not that far from the critical support line of 1.2460. Has it gone too far? Here is the view from SocGen:
Here is their view, courtesy of eFXnews:
Societe Generale FX Technical Strategy Research notes that USD/CAD has reintegrated within the steeper channel since 2012 and has accelerated its decline towards 1.25/1.2460 which is corresponding to last year through and is close to the 38.2% retracement of whole up move from 2007.
“More importantly it is closing in on the lower bound of the aforementioned channel. Weekly stochastic has now reached a pivotal floor which suggests the correction looks a bit overstretched.
1.25/1.2460 will be a crucial level; a tentative pause can’t be ruled out once this is achieved.
Short term, the pair has reached the lower bound of an hourly channel, however, a move beyond immediate hurdle at 1.2620 is needed to signal early signs of recovery,” SocGen argues.
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