Forex Technical Update
USD/CAD 1H Chart 7/10/2012 10:35AM EDT
The USD/CAD appears to have formed a head and shoulders pattern in the 1H chart. A head and shoulders patter is traditionally seen as a warning for bearish reversal after a rally. However, the other side of it is that it is simply an ABC correction. A pullback can often help identify if its the reversal pattern, or just a corrective move to be followed by bullish continuation.
The 1.02 level may be key during the 7/10 US session. A break above opens near-term 1.0230 resistance, and then the 1.03-1.0315 resistance, which is also near a declining trendline that has been holding the declining in since the beginning of June.
On the other hand, a hold below 1.02 exposes the short-term pivot at 1.0155.This was consolidation resistance last week before it broke after the NFP and Canadian data on Friday (7/6)
A break below 1.0155, opens up the 1.01 low from last week. Below that the bearish outlook at the moment is limited to the 1.0050/60 pivot area.
USD/CAD 4H Chart 7/10/2012 10:38AM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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