USD/CAD 4H Chart 7/31/2012 8:30AM EDT
The USD/CAD has been sliding sharply in the short-term, the latest swing breaking below the 1.0050 pivot, which was resistance from February through April. After that break the market extended lower and tested the parity level, so far bouncing off of it, as seen in the 4H chart.
The RSI tagged 30, establishing bearish momentum, and the moving averages are in bearish alignment. In the near-term, a rally has the 1.0065 pivot to monitor for resistance.
Looking at the latest downswing, the 38.2% retracement is at 1.0090, and 50% retracement is at 1.0117. The area between is a valid correction target from the perspective of reverting back to the mean, during a downtrend.
If the market breaks through parity after a brief bounce, the next near-term support is at 0.9930-0.9940 area, at 78.6% retracement of the 0.98 to 1.0445 rally seen in the daily chart.
USD/CAD Daily Chart 7/31/2012 8:33AM 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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