10 Jul 2013
Flash: USD/CAD correction from 1.06 nearing completion – TD Securities
FXstreet.com (New York) - According to the TD Securities Team, “The USD/CAD‘s correction from 1.06 may be nearing completion.”
Indeed, the USD rallied hard from the low 1.05 area yesterday, as we expected, but the short-term trend lower has continued to pressure supports in the 1.05 zone in the overnight session. Earlier this week, we noted the clear divergence between the spot market (higher highs) and the slow stochastic (lower highs) on the 6-hour candle chart since late June and underscored tendency for such developments to signal a market that was prone to a correction.
Ultimately, the drop in spot so far has been relatively modest but the correction may be more or less played out now as the oscillator is nearing oversold levels. “We look for support between 1.0475/1.05 near-term. Above 1.0531 intraday is bullish.” the team adds.
Indeed, the USD rallied hard from the low 1.05 area yesterday, as we expected, but the short-term trend lower has continued to pressure supports in the 1.05 zone in the overnight session. Earlier this week, we noted the clear divergence between the spot market (higher highs) and the slow stochastic (lower highs) on the 6-hour candle chart since late June and underscored tendency for such developments to signal a market that was prone to a correction.
Ultimately, the drop in spot so far has been relatively modest but the correction may be more or less played out now as the oscillator is nearing oversold levels. “We look for support between 1.0475/1.05 near-term. Above 1.0531 intraday is bullish.” the team adds.