USD/CAD 4H Chart 7/26/2012 1:53 PM EDT
The USD/CAD slid after Draghi’s comments, falling 100 pips from 1.0165 to 1.0065. It sits above 1.0065, pulling back to 1.01 during the 7/26 US session, respecting last week’s low as support. Looking at the 4H chart, we basically see a range between July’s low at 1.0065 and July’s high at 1.0250. The RSI whips between 30 and 70 showing sideways momentum. The moving averages show just a tad bearish bias, but not strong at all.
If the market continues lower, it should be noted that the 1.0050 level was a key resistance pivot from January through April 2012, as seen in the daily chart. If not 1.0050, the parity level (1.00), is also a psychological support. A break below parity then exposes the 2012 low at near 0.98.
On the other hand, if the market rallies back to 1.0250, it will meet not only July’s high but likely the declining channel resistance. I would expect at least some short-term resistance there, but a really above exposes other 2012 resistance pivots at about 1.0355 and 1.0440.
USD/CAD Daily Chart 7/26/2012 1:57PM 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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