USD/CAD Daily Chart 10:10AM EDT 10/29/2012
Trendline break: There is a trendline projected from the 1.0441 high from June 1. This week starts (10/29) with a break above this trendline, which started last Friday (10/26). The RSI reading also broke above 60, a sign that the bearish momentum from the downswing since June is lost.
Targets: The breakout exposes the 2012 high of 1.0441. But a more conservative target would be the 61.8% retracement level at 1.0131. If the market shows ability to hold above 1.0, it builds the case for higher targets.
Throwback: For now, the ability to bounce off a previous resistance pivot at 0.9886 was a good sign for the test of parity. If the market then comes back and falls below 0.9885, the break above the trendline and/or above parity is not clear. In fact if there is a slide below the rising trendline as well, we should refocus on the bearish outlook at least to 0.9733 pivot and possibly the 0.9631 low.
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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