Forex Technical Update

USD/CAD

USD/CAD

  •  The USD/CAD in the 1H chart is in a declining channel that so far is categorized as a correction, because the previous rally was a 5-wave rally, suggesting it was an impulse wave up.
  • So far, the market has respected the channel resistance, and a double bottom attempt is in suspense.
  • The RSI's ability to kiss 30 kills the bullish momentum and establishes a bit of bearish momentum in the short-term. However, the market is still trading above the 200SMA, and the 61.8% retracement level.
  • If the market breaks above 0.9865, we would be breaking above the channel resistance as well as an important pivot seen as support earlier in September.
  • This also forms a double bottom and targtes 0.99 in the short-term. The bullish scenario is quite limited, but a conventional breakout of this type of channel targets the origin, which is at 0.9965.
  • Only a break above 1.0 opens up a medium term bullish outlook. Otherwise, traders will be looking to get out quickly before testing the parity level.

 

 

 

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Fan Yang CMT
Chief Technical Strategist

FXTimes