Forex Technical Update
USD/CAD 4H Chart 9/6/2012 2:11PM EDT
The USD/CAD has been ranging roughly between 0.9950 and 0.9840 since mid-August. After starting this week with a bounce off the 0.9940 support area, the USD/CAD then fell sharply during the 9/6 session, falling below 0.9840 and almost toughing the 2012 low at 0.98. The 4H chart shows the market's ranging condition, and actually a descending triangle breaking down.
If the market has trouble breaking below 0.98, it is likely that it is stalling ahead of Friday's key NFP data. The key is how the market interprets the data in relation to the prospect of QE3. Poor data, below 100K for example, could heighten expectations of more Fed stimulus, which can be USD-negative and commodity-positive. CAD being correlated to oil, will likely gain in that scenario.
A break below 0.98 can expose the USD/CAD to support pivot at 0.9720, and then into the 2011 lows just above 0.94 as seen in the hourly chart.
USD/CAD Weekly Chart 9/6/2012 2:15PM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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