USD/CAD Hits Channel Resistance

• Day: The USD/CAD is in a range roughly between 1.0150 and 1.07. To be more specific, there is historic resistance at 1.0670.
• After 2 tests, today’s price action so far heading into the US session, is a reversal candle. If the candle is equal or larger than the previous up-candle, it may signal a reversal.
• As always between this range, the 1.04 area may provide some initial support for the decline. Perhaps it can extend to 1.0325 (61.8% rertracement).

• 4H: A slightly closer look shows the USD/CAD developing a double top. Remember though you should not define it as a double top until the base is broken, but anticipation is good for preparation.
• Here we can see a breakout projection that points to 1.0320 the area, which as we saw in the daily, is the 61.8% retracement level.
• There are support factors, but they are not as significant in a ranging market. The USD/CAD has been ranging for all of 2010.
• The fact that non-farm payroll is coming up actually helps the case that the market is looking to return to the middle of the range, and in doing so may trend in the near-term pass the equilibrium of 50%, and reach 61.8%.

Fan Yang
Currency Analyst
Commodity Trading Advisor

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All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.