USD/CAD 4H Chart 1:40PM EDT 11/6/2012
Parity: The USD/CAD has been in rally since 0.9630 September-low to a recent October-high of 1.0018. The failure to clearly stay above 1.00 shows that bulls have not fully taken. In fact we have some bearish action from here as the USD/CAD falls in a declining channel seen in the 4H chart. The RSI is breaking below 40 showing loss of bullish momentum in the 4H chart. It is approaching the 0.9910, 38.2% retracement mark.
Support: A possible area to monitor for support is around the 50% retracement of 0.9875. There is a support pivot at 0.9886, and a previous resistance pivot at 0.9875. Holding above this area is a clue for further bullish intent to try clearing the parity level again for further bullish confirmation.
Bearish break: Further decline with a break below 0.9840, 61.8% retracement and a rising trendline suggests that the 2 month rally in September and October might not be a bullish development but a corrective rally to a bearish mode in the higher time-frame. This re-introduces the bearish outlook with 0.9733 October-low in sight, as well as the 0.9630 September low.
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.
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.