USD/CAD awaits flag pattern breakout

5-minute chart

USDCAD m5 (03-23-2016 2248).png

Pair’s bullish break from the flag pattern would open doors for a rise to 1.3308 (50% of 1.1920-1.4690) – 1.3340 (23.6% of 1.4690-1.2923).

However, short-term averages 5-DMA and 10-DMA stand overstretched hence fresh offers around 1.3308-1.3340 is likely to push the spot back to 1.31 handle.

Conversely, a bearish break from the flat pattern would push the spot back to 1.31 handle. Further losses are unlikely given the sharp sell-off since Jan  has led to a loss of momentum.

Continuation of the bearish trend is seen only below 1.29323 (Mar 18 low).

 

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