Forex Technical Update August 9, 2010
USD/CAD in a Wedge After Rallying from Support
- 1H: The USD/CAD rallied sharply after declining to almost 1.01. I mentioned there was support just below 1.02.
- Initially, the RSI was showing a bearish signal. However, after Friday's rally that became invalid and there is actually a bullish signal now.
- The market is currently in a wedge. It is consolidating just above the 200-period simple moving average.
- Daily: The market has been behaving the way anticipated after breaking the triangle pattern. The 1.02/1.01 area proved to be support as it has persistently this year.
- Friday's price action is very suggestive of a reversal. The RSI is not telling us much, which mostly means that there is no trend.
- In this ranging environment with very short-term bullish bias, the first possible target is the 1.04 area. This may give some resistance as the 61.8% retracement level. The 50 and 200-period simple averages both reside near that level.
Commodity Trading Advisor
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