Forex Technical Update
The previous USD/CAD update saw the market trading near triangle support with bearish momentum. The market then respected support near 1.0124 and rallied sharply, pushing the 1H RSI above not only 60 to show loss of bearish momentum but also above 70 to establish bullish momentum in the short-term. Since 1.0266 the market has retreated, respecting the 200 hour simple moving average. The correction has been in an ABC structure supported just above 1.02, near 38.2% retracement. This correction can be seen lower toward 1.0196, 50%, or even 1.0179, 61.8%, and still look bullish, especially if the RSI reading can stay mostly above 40. Below 1.0179 however, the market will look more likely to retest the projected triangle supports. However, if the bullish continuation does materialize, the short-term target is 1.03, and then we can use a measured move, which at this point would bring us to about 1.0350 and test the triangle resistance.
If the bears manage to pull USD/CAD to triangle support, it will have a good chance to break as there is bearish bias. seen in the 4H chart, where the market is respecting the 200 4H SMA. A return to parity would the short-term target if this bearish scenario materializes (first sign is break below 1.0179)