Forex Technical Update
USD/CAD 1H Chart 8/27/2012 7:38AM EDT
The USD/CAD put in some bottoming action last week, but has yet sustained a rally back to parity, held under the 0.9950 level. It has also put in a support pivot at 0.9885, before testing the 0.9948 resistance pivot a total of 3 times, all falling back afterwards.
Note also that the market started this week establishing the 0.9925 level as a key intra-session pivot as well, and showing bearish intent since. The focus for the 8/27 US session is going to be the 0.9985 support pivot. A break below this exposes the 0.9842 low from last week, below which the 0.98 2012 low awaits. But first, let's focus on 0.9842, if 0.9880 is cleared.
If risk-on trading makes a comeback this week after stalling last week, the loonie (CAD) should also strengthen as the USD softens. Take a look at the S&P500 to monitor that correlation. Also, the CAD is correlated to oil prices, which has gotten flat. Oil should also rally during risk-on trading, so the tide of risk should lift equities, oil, and the Canadian Dollar against the US Dollar
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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