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The Forex market was fairly uneventful today as most currency pairs consolidated to start the week. However tomorrow’s event risk should get the markets moving again and will likely persist through Thursday.
USDCAD has been in an uptrend since the pair put in a major bottom in July of this year. For the past two weeks the market has been consolidating, forming a descending channel that is best seen on the 4 hour chart.
The pair is now approaching a key support level at 1.1260 which intersects with trend line support from September 4th. This is a “make or break” level for the pair. In other words if a break of support occurs, we could see a larger pullback before another move higher.
Summary: Wait for the market to test the 1.1260 level as support and watch for bullish price action. Key resistance comes in at channel resistance. If the market can break channel resistance, watch for a retest of the 1.1465 horizontal resistance level.
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