Forex Technical Update
The USD/CAD has found short-term support at 0.9980 after breaking below parity. Looking at the 1H chart, we see that the rally is taking a second leg (or 3rd wave up), so it is possible that this is a C wave in an ABC correction. The downtrend seen in the 1H chart has been choppy, but it has been trading in a declining channel and staying under the 200H simple moving average. The current rally will meet that channel's resistance when it get's close to 1.0100. There is the 200 H SMA and 61.8% retracement (of the 1.0146-0.9980 swing) clustered around 1.0080.
I don't show it here because it would clutter the chart, but if this C wave gets to 1.0080, it is also just about 161.8% expansion of A, making the 1.0080-1.0100 area a key zone of resistance.
The 4H chart shows a larger perspective of how the declining channel has anchored below a traingle. However, if the market anchors out of this channel, which would be clear with a break above 1.0100, we can be looking at the 50-61.8% retracement, as well as the 200 4H SMA. A 1.0150 target could be viable. Furthermore, if the RSI breaks above 60, and pushes above 70, we should start considering flat to bullish market development, especially if price manage a rally above 1.0080, where the 200 4H SMA is, and where the triangle apex would be.
Fan Yang CMT is the Chief Technical Strategist of IBTRADE and FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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