Mizuho predicts this is the next $1 trillion stock
USD/CAD entered a flying mode following the Fed’s hawkish shift on Wednesday. However, today, the pair hit resistance at 1.2486, and then, it pulled back. Overall, the price structure remains of higher highs and higher lows, well above the upside support line drawn from the low of June 1 and thus, we would consider the short-term picture to be positive.
The rate may retreat a bit more, perhaps to test the 1.2386 barrier, which is near the inside swing high of last Thursday. The bulls may regain control from there and push the action above 1.2486, thereby confirming a forthcoming higher high. Such a move may initially target the peak of Apr. 22, at 1.2535, the break of which could carry larger bullish implications, perhaps opening the path towards the 1.2627 area, defined as a resistance by the highs of Apr. 8, 13, and 20.
Shifting attention to our short-term oscillators, we see that the RSI exited its above-70 zone, while the MACD, although at extremely positive levels, has topped as well and moved below its trigger line. Both indicators detect slowing upside speed and support the notion for some further retreat before the next positive leg.
Now, in order to start examining a larger correction to the downside, we would like to see a dip below 1.2340. This may initially pave the way towards the 1.2290 barrier, marked by the inside swing high of May 6, where another break could see scope for extensions towards the inside swing high of June 15, at 1.2203.
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