Forex Technical Update

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USD/CAD 1H Chart 8/27/2012 7:38AM EDT
"USD/CAD

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.

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 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.