Forex Technical Update
Previous: USD/CAD Has 1.02 In Sight (6/14)
USD/CAD Chart 1H 6/18/2012 9:55AM EDT
The USD/CAD ended last week and started this week with a push below 1.02 that ended up being very brief. The 1H chart shows the market failing to clear below 1.02, returning above a short-term trendline, while pushing the RSI reading above 60. The price action looks bullish in the short-term but there will be another key resistance as we get close to 1.03.
When you look at the 4H chart, you see that a break above 1.0325 is likely going to kill the bearish outlook, especially if the RSI reading aslo pushes above 60. There would still be a near-term resistance pivot at 1.0350 to monitor, but above that, we are likely opening up the May-high near 1.0440.(seen in the 4H chart).
USD/CAD Chart 1H 6/18/2012 10:00AM EDT
Since the Loonie (CAD) is correlated to oil, let's take a look at the WTI crude oil chart. You can see that it has been consolidating a bit but is in a bearish trend. The RSI in the 4H chart is stuck between 40, but has been below 30 below that so the bias is still bearish.
If the market can clear above 87 and push the 4H RSI readiong above 60, then the USD/CAD might slide lower.
However new lows below the 81.00 handle should give USD/CAD more upside risk.
WTI Crude Oil Chart 4H 6/18/2012 10:05AM EDT
Fan Yang CMT is a trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of rex News, Analysis, Education, Videos, Charts, and other trading resources.
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