Forex Technical Update
USD/CAD fell through the parity level in Thursday European trading. The break below 1.0 is a significant sign of weakness in USD/CAD bulls. This is mainly USD-weakness, but also contributed by commodity currency strength. The daily chart shows the market break below a projected rising trendline as it slid below the 50% retracement level and parity. Now it is looking at 61.8% retracement at 0.9884 as the next possible support. Note the RSI also attempting to break below 40, which would reflect the invalidation of the bullish momentum established by the rally since the 0.94 low in July to the 1.0670 high in September.
The 4H chart shows the market in a sling shot action respecting the 200 period simple moving average and the 1.0200 level as resistance. Now if the market respects 1.00 as resistance, we can confirm further bearish intention. If USD/CAD finds support above the 61.8% retracement level and breaks back above 1.0200, it is going to signal a completion of the current bear run as a correction, and flip the bias back to the upside.