Forex Technical Update
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).
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.
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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.