Forex Technical Update
The USD/CAD continues lower with the Loonie buoyed by its correlation to rising oil prices. It has been ranging since February roughly between 0.9840 and 1.0050. During today's 4/25 European- US trading session, the market is breaking below the 0.9840 range support. The 4H RSI shows persistent bearish momentum developing as it tagged 30, stayed below 60, back below 40 and is tagging 30 again.
Because the market has been falling sharply, and the momentum may start to be oversold, there is a possibility of a pullback. The bullish outlook for the pullback should be limited at most to 0.9940, which is the central pivot of the range, and also where the 200 4H SMA resides (also a reflection of mean price action). However another way to look at it is that if the market breaks below 0.9840 and fails to push back above 0.9940, we maintain the bearish outlook to lower pivots. This means, a rally could be considered a correction to be faded into bearish continuation. If a pullback does come, let's monitor the 0.99-0.9940 area for renewed selling.
The next support pivots are 0.9780 and 0.9720. A break below 0.97 then opens up the lows from 2011 in the 0.94-0.9450 area. (Low was 0.9404).
A break above 0.9950 on a pullback however should shelf the bearish outlook, with upside risk to 1.0, and 1.0050 first.
Fan Yang CMT is a trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes and IBTrade will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.