Forex Technical Update

Previous: USD/CAD Fails to Break Triangle Support; 1.02 is Important Resistance (1/5)

USD/CAD

USD/CAD

 The 4H USD/CAD chart shows a market picking up bullish momentum as the RSI reading pushed above 70. In the near-term, this is overbought suggesting some throwback. But going forward it does show bullish momentum. Price broke 1.03, which also cracked an inner triangle resistance as well as the support level for mid-December double top. Ability to do so suggests extension of the current bullish outlook. The outer and more significant triangle resistance is near 1.04. For a correction, we see 1.0225 as 38.2% retracement and a previous resistance pivot, ability to stay above this level confirms that we are still in a bull run toward the outer triangle resistance. Preferably the market should stay above the 1.02 clip for a clear bullish market. Below that, if the market breaks below 1.0168, 61.8% retracement and near the pivot from Jan 4 and 6, then the bullish market should be shelved.

The daily RSI reading is stuck between 40 and 60. Inability to push below 40 shows that there is still a bullish tilt, especially with this triangle trading above the 200 day simple moving average. Still to revive the bullish momentum, we will need to see the market break above 1.04 (outer triangle resistance), and push the RSI above 60. The short-term target for an upside break is 1.0650, near the high of the triangle.

USD/CAD

Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.