USD/CAD 4H Chart 10:15AM EDT 11/7/2012
Falling Channel: The USD/CAD has been trading in a declining channel since hitting a resistance at 1.0018. The previous update noted bearish price action within the channel that had the 50% retracement at 0.9875 in sight. As we get deeper in the 11/7 US session, we see the pair tag this retracement target, which was coincident to the projected channel support, and bounce up sharply.
The RSI hit 30, showing some short-term bearish momentum. If the RSI can hold under 60, preferably 50, then it shows attempt to develop further bearish momentum. However the bounce from 50% retracement was very strong, and one has to respect the possibility of a bullish breakout, if not to parity, to a resistance pivot near 0.9970.
Bearish outlook: Otherwise, further bearish correction has room toward the 61.8% retracement level at 0.9842, which is near a rising trendline (this trendline is likely to be near higher if price turns down tow it). a break below the trendline introduces bearish outlook, and clearing below 0.9840 gives more weight to it.
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.
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