Maybe trading dollar before the FOMC and the interest rate decision is not the brightest idea on the record but we need to mention this interesting setup on the USDCAD. The pair was previously mentioned on the 3rd of December after the chart was rocked by the large bearish gap. For some traders that was a strong sell signal but we warned our readers not to get too bearish:
„Gaps like to be closed so the leading short-term scenario now is an upswing. I would play this situation safe and in my opinion, the sell signal will be triggered, when the price will break the yellow horizontal support. As long as we are above, buyers can still think about some kind of a defense. „
That was a great call. The price did not manage to break the support so the proper sell signal was not created. Instead of that, we came back inside the channel up formation, waking up back the buy signal. On Monday, the price made a decisive upswing and finally broke the resistance created by the highs from the end of June. Combination of those two factors is a significant signal to go long. FED rising rates today is no longer so certain as it was few weeks ago but traders seems quite optimistic, at least here, on this pair. As always, this view should be quickly verified.