Forex Technical Update

USD/CAD 1H Chart 4:35PM EDT 1/23/2013

USD/CAD 1/23/2013 1H chart

Range Breakout: The consolidation range we saw yesterday first broke to the downside, but price action pulled back immediately and showed that it was a false breakout during the 1/23 US trading session. In the previous USD/CAD update, I noted that a break to the downside is against the trend in the 1H time-frame while the bullish break is with the short-term trend. Therefore, if you followed trend-following bias, a failed trade to the downside, would easily have been covered with the so-far successful break to the upside.

Trendline break, parity: Also, I noted that the upside break is a break above a falling trendline seen in the daily chart. The 1.00 psychological level was anticipated as a challenge, and the market indeed stalled there after the break. Now, further extension above 1.00 needs to test 1.0055, and a break above that brings further bullish outlook in the USD/CAD, opening the May 2012 resistance pivot at about 1.0445. You can also say that 61.8% retracement at 1.0130 is a more conservative bullish target. Maybe we need further evidence that the market wants to stay above parity (by testing it as support) to give way to more bullish outlook.

USD/CAD Daily Chart 4:43PM EDT 1/23/2013

USD/CAD 1/23/2013 daily chart

Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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. FXTimes 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 analysis.

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