Forex Technical Update
- 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.
- 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.
Fan Yang CMT
Chief Technical Strategist