USD/CAD 4H Chart 10/4/2012 11:00AM EDT
Channel support: The USD/CAD has not been able to extend much further after yesterday’s triangle breakout to the upside. A declining trendline looming above remains intact (refer to daily chart below). In the 4H chart above, we see that a throwback is basically invalidating the breakout, and threatening to break below a short-term rising channel support.
As I post this update, price action is very heavy and already has the 0.98 handle in sight. The 4H RSI reading has been showing bullish momentum, but that can change if it falls below 40.
Flag: When you look at the daily chart, you see that the market remains in a bearish mode since the 1.0444 May-June-high. The RSI reading tagged 30, and has so far remained under 60, a sign that bearish momentum has been maintained. The “channel” seen in the 4H chart can be seen as a “flag” pattern in the daily chart. A break below the flag and the 0.98 handle expose the 0.97 handle, and the low near 0.9635. IF the market can push even lower below 0.96, the 2011 low in the 0.94-0.9440 area will be a major area to monitor for support.
USD/CAD Daily Chart 10/4/2012 11:09AM 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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