Since the beginning of January 2016, the USD/ CAD pair has been in a steady decline, dropping all the way from 1.46881 to a low of 1.2830 last week.
That’s a whopping drop of over 1800 points!.
It is definitely due for a retracement. and looking at the price action, the loonie appears to have done a positive divergence if we use the MACD indicator.
A positive divergence occurs when the market makes a new low ; but the MACD indicator fails to confirm that low as shown in the diagram below:
Looking at the USD/CAD chart below; We can see that a MACD positive divergence has occured with the pair in the last week.
We would recommend buying now at 1.3044 with a stop around 1.28315.