The USDCAD has corrected to 1.0430 equaul to the downtrend. Typically the third test holds and we could see a swift retracement back to 1.0286 ( 50% retracement and S3). A break north would target the R5 and the .270 fib EXTENSION.
The EURUSD took out our top yesterday and has corrected since then. It is at the decision point - bounce on the trend line and keep the up move in place. If so, I would expect some consolidation before the move to the 1.2600. The bearish scenario is a break of the trendline and a move back to the 1.2274.
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WHAT ProAct Traders SEE: We have continued to march northward as the dollar continues to strengthen. Looking to continue to the .786 retracement which is also the resistance - R6 of this move. There is resistance also there from the day chart so expect sellers will enter there.
At this juncture, price has tested 1.24 with still an upside resistance at 1.2467 (set 10/27/2008) as a triple top on the Hourly while also forming a head and shoulders. It’s also the end of the week. So, it seems quite possible that, with the pair having trended up for 2 weeks now, that a retracement / profit-taking session may be due. Another test of 1.24 will likely lead to an extension of 1.2457-67. Will look for sellers there and a square up on Friday then back to the 1.2324(S3) or lower.
Still room to go on this up move. Next target is the 1.2456 (.618 fib extension and former top). I think we have enough bulls to get to the .786 fib extension and the .786 fib retracement of the big down move. Looking for sellers at that level.