Profit taking prospects in 1.2490s

  • USD/CAD broke the neckline of the H&S pattern and subsequently fell towards the 1.25 figure. 
  • Bulls looking to step in as bears exit before the close of the New York session. 

Following the prior session’s analysis, where it was stated that the ”bears can look near to 1.25 the figure and 1.2480 as the next area of expected support:

… the price has fallen sharply to test below 1.25 the figure.

The less committed bears will be seeking to take profits at this juncture which gives rise to prospects of a bullish correction. 

The following illustrates the potential for at least a 50% mean reversion of the prior two sessions:

USD/CAD daily chart

As its stands, the New York session is coming to a close and traders will be keen to square positions ahead of the rollover and start of the Asian day. 1.26 is a figure that will be eyed for the forthcoming days if bears cannot keep control below 1.25 the figure. 

DXY techncial analysis

A break of this critical area of support could open the way to the midpoint of the 94 area. However, a bullish correction back into the midpoint of the 95 handle prior to any further downside might be on the cards first. 

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