USD/CAD 1H Chart 3:20PM EDT 1/22/2013
Short-term bull, consolidation: The USD/CAd has been in a bit of bullish mode since mid-January, staying above the 0.98 handle. Looking at the 1H chart, you see bullish momentum as the RSI remains above 40, and has been able to go above 70, especially in last week’s attack of the 0.9945 resistance. The moving averages are in bullish alignment, but a few shorter ones are converging, reflecting consolidation. We now have a consolidation between 0.9945 and 0.9907. The RSI is stuck between 40 and 60 reflecting this consolidation momentum.
Falling trendline: It should be noted as we look at the daily char that this short-term consolidation in the 1H time-frame is occurring as the market is attempting to break above a falling trendline seen in the daily chart. Here direction is not clear, and 1.0 remains a key psychological level above the current price. Still, ability to break consolidation in the short-term is also a break above this falling trendline, which can open up some bullish outlook, with 1.0055 as a key resistance level to clear before further bullish outlook. (You can see this resistance from end of 2011-beginning of 2012 as well.)
USD/CAD Daily Chart 3:23PM EDT 1/22/2013
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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