This pair has produced solid head and shoulders pattern right below a key resistance level.
Price is overbought due to the urgency of the rise since the last touch of the trend line and may reverse due to an imbalance of price:value. That noted, this is due to the increase of the BoC interest rate from 0.5 to 0.75. As capital flows to Canada we will see increased pressure on the resistance zone. Due to the solidarity of this level, if price breaks 91.00, we could see a rally north to around the 94.00 level.
With the recent, interest rate hike I will not be taking a short position at the resistance level; I will be keeping a close eye on this pair for movement after the break/bounce.
Price is overbought due to the urgency of the rise since the last touch of the trend line and may reverse due to an imbalance of price:value. That noted, this is due to the increase of the BoC interest rate from 0.5 to 0.75. As capital flows to Canada we will see increased pressure on the resistance zone. Due to the solidarity of this level, if price breaks 91.00, we could see a rally north to around the 94.00 level.
With the recent, interest rate hike I will not be taking a short position at the resistance level; I will be keeping a close eye on this pair for movement after the break/bounce.
Comment:
Here is the larger picture, showing key zones for support/resistance. If price breaks, I will look for the turn to support with a bullish harmonic pattern forming at the level before a further rally!
