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.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.