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A potential reversal for Loonie

Monday, October 8, 2018 9:44 AM GMT

Friday’s NonFarm Payrolls report was dissatisfactory. The American economy gained only 134,000 positions in September, while Traders expected 185,000 positions. However, the unemployment rate declined to 49-years low of 3.7%. Also, traders focused on the major news from Canada, such as Unemployment Rate [Previous: 6%, Actual: 5.9%] and International Merchandise Trade [Previous: $-0.11B, Actual: $0.53B]. Today USA’s citizens enjoy Columbus Day and Canada’s citizens enjoy Thanksgiving Day.

Looking at the daily timeframe, Loonie is approaching the 50.0% Fibonacci resistance level as well as it is following the trendline (T1). Moreover, Stochastics is highly oversold which indicates a potential bearish setup.

Daily

Additionally, heading to H4 timeframe, RSI has been within oversold zone since the market’s opening and calls for correction.

H4

Overall, the setup points out a potential reversal offering a bearish opportunity. On the other hand, if the oscillators remain overbought excessively, then it may indicate a bullish momentum strengthening.

Always review your own analysis. If there is a confluence between the current study and your own strategy, then you may have even better trading setups.

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