Forex Technical Update

Previous: USD/CAD - Looking for Breakout in Momentum (2/8)

USD/CAD

USD/cAD

 The USD/CAD is in a sharp breakout to the upside. A bottom was building while it consolidated between 0.9927 and 0.9992. Finally in the 2/10 European session, the market pushed above 0.9992 and parity, showing strength in the short-term. This rally also broke above a declining channel in the 4H chart, AND pushed the RSI above 60 to kiss 70 by the 2/10 US trading session. If a subsequent throwback respects the 0.9990, it would be a very clear clue that the bulls are in charge. The first target is the 1.0063-1.0080 pivot area which includes the 38.2% retracement of the channel. The next level of resistance is 1.0105 (50% retracement), but more importantly, 1.0147 (61.8% retracement and the next declinine trendline).

USD/CAD

The 1H chart shows a market breaking out of range-bound price action as well as momentum. The RSI was stuck between 40 and 60, and finally broke to the upside surging above 70. It is in a throwback. While it would be clear confirmation if the market stayed above 0.9990 and 38.2% retracement, the market does not invalidate the breakout until a break below 0.9967 (61.8% retracement). The RSI is showing bullish momentum, and can confirm maintenance of it if it fails to break below 40 (preferably staying above 50), and is pushed back above 60.

We will visit this pair to assess risk and reward as well as come up with a trade plan for next week during Monday's Market Intelligence Briefing at 8:00AM EST. To get free access to these live events, register here at IBTrade. You will receive and email with the link and password before each session once you have registered.

Fan Yang CMT is the Chief Technical Strategist for IBTRADE, educator trader and main contributor for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.