Forex Technical Update

Previous: USD/CAD in a Pullback; 1.0080-1.0100 is Key Resistance Zone (1/30)



 The USD/CAD has been persistently bearish as seen in the 4H chart trading in a declining channel. The RSI has been held under 60 and has been able to tag 30, reflecting the continuous bearish momentum. As we gear up for the 2/7 US trading session, the pair is trading at the resistance trendline of the declining channel. A break above parity (1.0) will be a clear sign of a bullish breakout. It will also break the 100 simple moving average in the 4H chart (200SMA in 1H chart).

A significant momentum breaker will require the RSI to break above 60 in the 4H chart. Otherwise, the correction may be flat instead of a sharper retracement. For a flat correction resistance at 1.0063 (38.2% retracement of the channel), could be important. It was also resistance on Jan 30, after being support during Jan. 23 and 19. This is also the December 8 low and support pivot.

Then the 50% retracement is at 1.0105, and 61.8% retracement at 1.0147. Then if the market is able to bring the USD/CAD back down below parity (before pushing past 1.02), we should be resuming the downtrend first to test 0.9927, for a break to open up the next important support pivot in the 0.9883-0.99 area (also 61.8% retracement of the 0.9405 to 1.0656 bull run).


Don't miss today's live briefing of the market's reaction to the RBA interest rate cut and what it means for the AUD going forward. Join Nick Nasad and Fan Yang CMT, as they guide you through this and other risk events to monitor throughout the week including following up with the USD/CAD. To gain free access live events register at here at IBTrade.

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