- 4H: The USD/CAD is showing signs of reversal after a strong bullish candle coming out of bottoming price action above the 1.0220 area. At this point, the signal is still a little “naked” or without confirmation. We do have a bullish divergence, and a break of a declining channel as well.
- At least a short-term bullish outlook exists towards the 1.0370 area. But a break above that and further confirmation is required for the intermediate term reversal outlook.
- 1H: Looking at the 1H time-frame to confirm at least the short-term reversal to 1.0370.
- There is a break of the declining channel, and a strong one at that. At the start of the US session, the market is indecisive. There could be a quick correction that could test the 1.02780 or 38.2% retracement level. This is just above the consolidation zone the market broke above.
- Continuation of bullish action after a quick pullback is enough to confirm the short-term outlook towards 1.0370. But as the market is in an established bearish mode, monitor the rally in case it falls short of the projection to the powerline.
Fan Yang
Currency Analyst
Commodity Trading Advisor
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. CMS will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.
Foreign currency trading is not conducted on an exchange. CMS is acting as a counterparty to its clients’ transactions and as a result, CMS’ interests may be in conflict with its clients. Since CMS acts as the buyer or seller in the transaction one should carefully evaluate any trade recommendation provided by CMS or any of its solicitors. Foreign currency trading involves a substantial risk of loss and may not be suitable for all investors.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.
