Perfect price action on the CAD/USD chart

CADUSD_chartThe daily chart of the CAD/USD is one of those examples where the description of technical analysis being an art and not a science, neatly sums up the price action of the last three months with perfect symmetry around the low January 2016. December’s bearish trend with its pause point in the 0.7200 region, followed by the second leg lower to touch a low of 0.6809 in mid January, has since been perfectly mirrored with a consequent rise, back to the congestion region at 0.7200 and a subsequent rally to regain the level of the initial move lower. Perfect symmetry coupled with sustained buying on the 20th January. This type of price action is unusual in the extreme. It is rare to find a rally of this extent from a single candle, simply because the general pattern is for the price action to consolidate first, and then to rally once the selling pressure has been absorbed.

So a wonderful example of art in action on the daily chart, and the question now is whether the picture will be completed with an extended congestion phase at this level and mirroring that to the left of the chart. This now seems likely given we are approaching a high volume node on the volume point of control, and if so art will be repeated.

By Anna Coulling

Charts by NinjaTrader and indicators from Quantum Trading

About Anna 1027 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

2 Comments on Perfect price action on the CAD/USD chart

  1. Anna I would like to ask you a question is your view meaning that the USD / CAD will resume it’s trend up or that it mostly will continue it’s downward rally ?
    thanks a lot for sharing your views .

    • The chart is the futures contract for the CAD/USD – where the currency is always quoted against the USD. If the futures are going up, then we can expect the USD/CAD in the spot market to go down.

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