Forex Technical Update
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USD/CAD 1H Chart 8/28/2012 9:20AM EDT
The USD/CAD is falling sharply, as I write this update. If has fallen below the 0.9880-0.9885 support pivot, and is heading to last week's support pivot near 0.9840. This price action and momentum (1H RSI falling below 40 and 30), shows failure of last week's bottoming attempt, resurfacing the bearish outlook toward the 2012 low near 0.98.
We can probably watch for some demand here at the 0.98 handle. If the market does not hold here, the 0.9720/25 area is a consolidation low from August through mid- September 2011. Maybe the we can look fro support there in the 0.97-0.9725 area.
Why even consider going against this trend? Well the moving averages in the daily chart are not convincing of a bear-trend. They reflect a range-bound market in the longer medium term. The further away from the sideways moving 200-SMA (which is also a sign of a sideways market), the more tension it has to return towards it, which is around 1.0088 at the moment.
USD/CAD 1H Chart 8/28/2012 9:30AM 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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