Forex Technical Update
- The USD/CAD has consolidating below the 1.0, parity level for all of August. To start September, the market broke above a consolidation pattern and is now cracking the important parity level.
- However, the most important break was that of the parity level which was psychological resistance.
- At the moment, we should not be so quick to assess this as a break. It is cracking, but such an important pivot should be broken, then tested as support before establishing a solid bottom to build strength on top of.
- In the very short-term, a swing projection seen in the 4H chart to 1.0070 should be enough to be called a break above parity.
- Then look for subsequent dips to test the 0.9950-1.0 level as support. If the provide support, we have a confirmed double bottom seen in the daily chart.
- At the moment, as I wrap up this update, there is a rejection from above 1.0. The battle is set, and if the market stays above 0.9950 in the US session, the bullish scenario would be very likely.
- It should be noted when looking at the daily chart, that the double bottom really was broken earlier near 0.9915, but parity had to be broken before bulls can have some confidence in the medium term.
- Also, a breakout projection targets somewhere near 1.0390. The fibonacci retracement level of 61.8% is at 1.03.
- A swing projection seen in the daily chart also has a target just above 1.03. It appears that with a break and hold above 1.0, we have the 1.03 level as a minimal projection target.
Fan Yang CMT
Chief Technical Strategist