Forex Technical Update
USD/CAD 4H Chart 9/17/2012 8:25 AM EDT
The USD/CAD has extended its decline below 0.97. QE3 expectation and the Fed's actual announcement of the stimulus pressured the US dollar, and propped up commodity currencies like the Canadian dollar. In the 4H chart we can see the pair falling within a declining channel throughout September. It starts this week with a test of this channel resistance.
A break above the channel resistance first deals with the 0.9770 pivot, where price would also likely meet the 200-H SMA. But really, the more important resistance would be in the 0.98-0.9840 area. A break above 0.9850 is probably part of a significant correction, and we will have to reassess whether the market can head back to the 2011 lows just above 0.94. Instead the focus would return to parity, 1.0.
A look at the 1H chart shows that the momentum in the near-term has not turned as the RSI is still at 60. If the RSI returns back below 40, and price back below 0.9690, a bearish continuation is likely taking place, and the focus remains on the 0.94-0.9440 2011 lows.
USD/CAD 1H Chart 9/17/2012 8:30 AM EDT
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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