Forex Technical Update

Previous: USD/CAD's Sharp Rally Challenges but is Still in the Scope of a Downtrend (3/5) Coverage of the NFP (3/9)

USD/CAD

USD/CAD

 The 1H USD/CAD chart shows a double bottom as the market finds support from the 0.9890 area. This is occurring just ahead of Canada's employment data to come out at 7AM EST, and the US Non-Farm Payroll data that comes out 8:30AM EST. The fact it is reverting back to the 200 hour simple moving average reflects the market is indecisive, waiting for the risk events to pass before pushing for direction.

If after the risk events the USD/CAD continues higher, let's see if real bullish momentum can gather. For that the 1H RSI should break back above 60, and tag 70. Price should rise back above parity. This would also break above a declining trendline and offer an early sign of bullish reversal in the medium term.

As we have noted in previous updates, a very important pivot resides at 1.0044, and a break above 1.0050 would be needed to open up the bullish scenario in the medium term for the upcoming weeks. A failure to break above 1.0044 maintains a bearish outlook on the USD/CAD and looks for at least another bearish swing below the current 2012 low at 0.9840, toward 0.98, and then the 0.97  handle (with a common pivot at 0.9715).

As I get ready to post this update, Canadian Change data came out -2.8K vs. the forecast of 14.2K, after a previous showing of 2.3K. The unemployment rate retreated to 7.4% after forecast of a no change of 7.6%. The initial reaction is a pause against the rally from the double bottom. Now the market awaits the next key risk event in the Non-Farm Payroll: Forecast 209K, previous 243K.

USD/CAD

Don't miss the opportunity to get in on the deep introductory rate offer for Market Intelligence Briefings including a 1-week free trial. Click on the link below to find out more:

http://www.fxtimes.com/market-intelligence-briefings-limited-time-offer-ends-3232012/

Fan Yang CMT is a trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

   

 

 

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes and IBTrade will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.