Previous: USD/CAD Trades at Declining Channel Resistance (2/7)
USD/CAD
The USD/CAD respected the declining channel resistance the last couple of times, but since finding support at 0.9927, its momentum has gotten flat. The 1H chart shows the RSI reading stuck between 40 and 60, reflecting the neutral and consolidation momentum. Today, a sharp attempt to break the declining channel resistance resulted in a quick rejection as the RSI also tested 60. If the market is to find a bottom, the RSI should rally above 60, but if the market is in bearish continuation, it should fall below 40.
To the upside, a break of the channel (seen more clearly in the 4H chart), first opens up parity, above which, 1.0060-1.0075 is the first important resistance zone. If the RSI in the 4H chart also nears 60, we can be expecting resistance considering that the market is still bearish. But if the market remains below parity, the market has downside risk toward 0.9980-0.9990, a previous pivot and 61.8% retracement of the 0.9405 to 1.0656 run (seen in the daily chart below).
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Fan Yang CMT is the Chief Technical Strategist for IBTRADE, educator trader and main contributor for FXTimes – provider of Forex 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 and IBTrade 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.
