Previous: A Look at the USD/CAD at Descending Triangle Support; 2 Bullish Scenarios (8/17)

USD/CAD

Triangle Breakout: A triangle is often a sign of congestion, or indecision. It reflects narrowing volatility as well as the market gets less and less intent on either direction. In a descending triangle, the highs are declining, while the lows are flat. This actually has a bearish bias as the bulls hold off the bears at a flat level, but the bulls retreat earlier and earlier. Let’s take a look at the case with the USD/CAD.

• The descending triangle support held at 0.9770. The market accelerated in the upside break, and broke above a pivot at 0.9870.
• These are bullish signs that the market is attempting to revisit the parity level.
• The RSI was supported above 40 and is cracking 60, showing maintenance of the bullish momentum established before the market entered into the congestion triangle.
• The USD/CAD is therefore poised to test 1.0 parity.
• Above that, we will basically see a double bottom in the daily. A conservative upside target is the 61.8% retracement level near 1.03.
• Note that in the daily, we have broken above the 200SMA, and is now respecting is as support. The RSI here has also kissed 70, showing establishment of bullish momentum.

Subscribe and become a member to share your views and join live discussions as well as webinars about the markets.

Fan Yang CMT
Chief Technical Strategist
FXTimes

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.