Forex Technical Update July 1, 2010 USD/CAD: Gartley Completed at 1.0650
- Daily: The daily chart shows that the USD/CAD has completed the Gartley mentioned in the video post (USD/CAD is the last pair discussed).
- The rall from 1.0135 area all the way to 1.0670 completes an AB=CD retracemnt pattern (another way to describe the Gartley).
- There is also expected resistance since this is between the 61.8% and 78.6% retracement levels.
- The RSI is breaking 60, but not necesarrily suggesting bullish outlook.
- I would stay reserved, even though the USD/CAD has rallied sharply, and look for topping here.
- Daily: The 4H chart shows the market starting a strong bearish 8am-12pm ET candle. However, that candle has 3 more hours to close. So far if it were to close this way, it is a strong bearish sign in the near-term.
- There is also a bearish divergence. I am not expecting a strong correction. I can still see the market rallying towards 1.1 area, but may 1.0850 area first.
- Therefore, this bearish divergence may be developing a consolidation from which a rally could spring from.
- One clue is the behavior of the RSI and price action. A positive reversal (If the RSI low is lower, but price low is higher) suggests further rally.
- This would occur if the price does not fall below 1.0470, since this is the price low corresponding to the last RSI low, which is already taken out, although the price low is still above the previous.
Fan Yang Currency Analyst Commodity Trading Advisor
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