Forex Technical Update

Previous: USD/CAD Poised to Attack Parity Above 0.9960 (8/11)

USD/CAD
USD/CAD 8/12/2011
0.9910 Pivot
:
- The USD/CAD is seen in the 1H Chart dealing with a double top.
- An important pivot is 0.9910. If the market can hold below this, we may confirm the double top.
- A break back below 0.9835 suggests bearish continuation.
- In the very short-term the bearish targets are 0.98, and the 0.9766 pivot. The 4H chart shows also the 0.9708 (78.6% retracement) target, and the 0.9640 (61.8% retracement) support. 0.9640 should be the maximum target for a bearish outlook considering such a sharp move to the upside before.
-  A break above 0.9910 however invites an attack at the 0.9960 double top resistance. A break above that signals a test of 1.00.
- Above parity, we can translate our very short-term bullish outlook into a medium-term one.
Bullish Structure:
- The 1H chart shows that the rally this week had a 5-wave structure and the consolidation since had an abc structure in the form of an expanded flat with an extended wave c that reached down to 61.8% retracement.
- Therefore at the momentum it is not clear if the double top or the correction was the mode. Again, a break above 0.9910 will help build the bullish case and invalidate the double top scenario.
- On further bullish confirmation can be that if we push above 0.9910, we want to see the market remain above 0.9880 in the US session to build further strength.
USD/CAD 8/12/2011 4H Chart

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Fan Yang CMT
Chief Technical Strategist
FXTimes