FxWirePro: USD/CAD bets on 11-1/2 years highs again – shorts only in short run, bullish trend to prevail in Q1 of 2016

USD/CAD might have halted here at this juncture but advice is not to bear trapped.

It seems that uptrend still remains intact as it is testing strong supports at 1.3804 zones to bounce back again.

No traces of selling pressures even though leading oscillators reached overbought zone (see bullish convergence).

Don't misinterpret the downswings: The pair on EOD chart has dropped from the 11-1/2 years highs of 1.40018 levels to the current spot FX at 1.3865 with leading oscillators converge these slumps but it doesn't seem to bother these indications alerted by RSI and stochastic curves.

Current price drops do not confirm the substantial volumes, on the contrary, scenario is different in long term uptrend there exists the convergence of volumes and price jump.

The uptrend has been moving in healthy uptrend channel with timely corrections on monthly charts.

The pair has cleared all major resistance levels decisively testing supports several times exactly at lower trend line.

Although loonie has dropped, the pair is not yet fragile as it has recently broken psychological resistance levels at 1.3719 levels (i.e. 11 and half years highs) which is still way beyond 21DMA.

This would likely establish new stage for USD/CAD bulls run in Q1 of 2016.

Thus, the trade idea is to add fresh longs on USD/CAD on every dips. Eyeing on such dips for better entry levels again by raising the stop for now to 1.38004 for targets around 1.3952, 1.40 junctions in end of Q1. Our initial take profit remains 1.3750, at which point we will reassess.