Previous: USD/CAD Testing the 0.99 Handle (10/19)
USD/CAD Daily Chart 9:45AM 10/22/2012
Swing projection to trendline: The daily chart shows the USD/CAD in another bullish swing. It is approaching the the 0.9975 swing projection target, which would also meet a falling trendline that goes back to the 1.0441 high on June 1. This suggests some resistance ahead, t least in the near-term. The RSI is now at 60, a break above which would suggest lost of bearish momentum. However, if the market remains bearish, the daily RSI should find resistance here at 60, given some elbow space.
Rally slowing: The 1H chart shows a bit of bearish divergence with the RSI. Price was also just trading at the upper bollinger band (here they are 3 standard deviations from the 200 SMA). After pushing above the band, it appears to be holding under it. In a sense this is also a bearish divergence relative to the distance to the upper band. These are initial signals that the market is decelerating and could be getting ready for a correction. Within the context of this bearish consideration, there is still some room to the swing projection and trendline at 0.9975.
USD/CAD 1H Chart 9:53AM 10/22/2012
Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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