Previous: USD/CAD Trading Down Near a Key Pivot at 1.0050 (7/19)

USD/CAD 1H Chart 7/20/2012 10:05 AM EDT

The USD/CAD continued lower this week, extending July’s bear run to lowest price levels since May. The previous USD/CAD update noted key support factors around 1.0050. During the 7/20 European session the USD/CAD found support at 1.0065, and rallied to 1.0130 by early US session.

The 1H chart shows the market push the RSI reading above 70, which indicates nascent bullish momentum. If after a throwback, the RSI can stay above 40, preferably above 50, the bullish momentum would still be intact in the very short-term.

The 4H chart still shows that this initial bullish attempt has yet to break away from June and July’s bear run from June’s high of 1.0440. We have two trendlines to challenge the bullish reversal. One is from the connection of the 6/28 high at 1.0362 and 7/12 high at 1.0248. A break above 1.0170 should take this trendline out, exposing the next one that connects the 1.0440 high from 6/4 and the 6/28 high at 1.0362.

We would probably need to break above 1.03 to break this trendline from June.

USD/CAD Daily Chart 7/20/2012 10:10AM EDT

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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