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.
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