Forex Technical Update
- USD/CAD has been in constant triangle formation, and false breakouts that have lead to larger triangle formations.
- Last Friday, we had another break to the upside, which was followed by a sharp decline back to the 0.9740 triangle support to start this week's US session.
- However, we see a strong outside bar form as soon as the 0.9740 level was touched. This shows that USD/CAD bulls are protecting this 0.9740 support.
- This adds to the significance of this level if it eventually breaks, but for now, let's see where a bounce can go.
- The fibonacci retracement levels show that a 50% retracement target is at the 0.9830 level, which is between a couple of previous support pivots, now to be tested as resistance.
- Above 0.9855 (above 61.8% retreacement as well), we can be in another attempt to rally towards parity.
- Break Below Triangle:
- The 4H chart shows that a break below 0.9770 was already a bearish sign, and a break below 0.9740 suggests first a near-term target of 0.97 (50% retracement), then a test of the 61.8% retracement level at 0.9640.
- A break below 0.9640 shelves any short-term bullish outlook towards parity, and suggests sideways action, with a bearish bias.
- Right now, we are also in sideways action, but the bias is bullish.
Fan Yang CMT
Chief Technical Strategist