Previous: USD/CAD Bounces off 1.0150; Stalking Rally to Confirm Strength or Lack Thereof (10/13)

USD/CAD

USd/CAD

The rally in USD/CAD remained below the broken triangle, showing that bulls are still in charge. The 1.02 level then failed as support and the market continued lower to test the week's low at 1.0133. The RSI reading in the 1H chart failed to sustain a break above 60, and is now returning below 40, suggesting bearish continuation momentum.

The 4H chart shows a swing projection toward 1.0080, 61.8% retracement. A more aggressive projection can be seen to test the parity level. The bearish outlook continues to gain weight if a pullback fails to break back above the 1.0150-1.02 area.

Risk-on Trading: CAD has correlation to oil, which is going up in the risk-on trading environment. Watch for the alpha markets such as the S&P 500 as well as oil to confirm the continuing strength in the loonie.

USD/CAD

Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.