Previous: USD/CAD Trading Back Above 0.98 (9/20)
USD/CAD 4H Chart 9/24/2012 7:30AM EDT
The USD/CAD gave a very deep throwback after cracking 0.98. The correction fell to 0.9730, but remained bullish as the low was higher than the previous, and the 4H RSI remained above 40 after almost kissing 70 and is now traveling back above 60. This shows maintenance of a bullish momentum, albeit a weak one.
The next resistance to monitor might be the in 0.9840-0.9850 area. Here we have the support pivot from the last medium term consolidation period that lasted a couple of weeks from middle to the end of August. The 200-4H-SMA is also in this area. This would satisfy a regression to the mean scenario where the market was overbought and corrects back to that time-frame’s 200-SMA.
If the USD/CAD extends above 0.9850, the market will next focus on the the resistance from that previous consolidation area, which would be up near the 0.9950 handle. This bullish outlook might be a tad aggressive and ambitious at the moment considering that the USD/CAD has been in a bearish mode since topping in June from 1.0444.
At this point, as we enter the 9/24 US session, if USD/CAD fails to break into new highs, and falls below 0.9730, we have a double top, and refocus on the low just under 0.9640.
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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