USD/CAD Chart 4H 6/22/2012 7:13AM EDT
The USD/CAD rallied sharply during the 6/21 session where risk off trading pressured commodity currencies and boosted the USD and JPY. As you can see in the 4H chart, the rally broke above a short-term trendline but is now testing the trendline that held June’s decline, at 1.03.
1.03 is also a psychological barrier as well as a resistance pivot seen before in June, and in May. A break above 1.03 suggests a completion of the correction so far in June, and opens up the June high of 1.0440.
In the 1H chart, the market seems to be forming a double top under 1.03. This reflects Friday session consolidation and may suggest some correction to the downside. A couple of clues that the market is still bullish would be: 1) The correction remains above the 1.0230 pivot, preferably staying even above the 200-hour SMA near 1.0240. 2) The RSI reading fails to fall below 40. 3) If the RSI pushes back above 60, momentum is showing a persistent development to the upside.
USD/CAD Chart 1H 6/22/2012 7:16AM EDT
Fan Yang CMT is a trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of rex 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.
