USD/CAD has made an immense move to the downside on Tuesday falling by about 200 pips.
USD/CNH returned below 7.00
SELL 6.99; TP 6.96; SL 7.0050
SELL 6.9450; TP 6.9100; SL 6.9550
BUY 7.0350; TP 7.0800; SL 7.0250
USD/CNH has been steadily declining since the start of October on hopes that the United States and China would take steps towards some kind of a trade deal. As a result, the pair closed below the key level of 7.00 for the first time since early August. This level together with 7.0290 (100-day MA) will now act as resistance. As long as the price is below it, we’ll see a top at the market. Only the clear sign that there will be no deal in the upcoming weeks will push USD/CNH above 7.03 and to 7.0880 (50-day MA).
On the downside, support is located at 6.95. Around it, there’s the line connecting 2016 and 2018 highs. The decline below this support will open the way down to 6.9090 (200-day MA).
Last week NZD/USD once again met resistance in the 0.6155 area. As you can see from the chart, this area stopped the pair twice before within the recent month.
It’s worth paying attention to AUD/JPY. The pair has approached the resistance line connecting April and May highs.
Has the US dollar lost a top position forever?
We know that hammer formation may be effective in identifying trend reversals. Let's study it a bit closer to see real-life cases.
CAD will get fresh volatility after BOC statement on June 3 at 17:00 MT time.