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Dec 20, 2014

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Home » Technical Analysis » Daily » CAD » USD/CAD Bounces Sharply from Channel Support to Resistance

USD/CAD Bounces Sharply from Channel Support to Resistance

Forex Technical Update

Previous: USD/CAD – Stalking a Corrective Channel (11/6)

USD/CAD 4H Chart 10:15AM EDT 11/7/2012

USD/cAD 11/7/2012 4H chart

Falling Channel: The USD/CAD has been trading in a declining channel since hitting a resistance at 1.0018. The previous update noted bearish price action within the channel that had the 50% retracement at 0.9875 in sight. As we get deeper in the 11/7 US session, we see the pair tag this retracement target, which was coincident to the projected channel support, and bounce up sharply.

The RSI hit 30, showing some short-term bearish momentum. If the RSI can hold under 60, preferably 50, then it shows attempt to develop further bearish momentum. However the bounce from 50% retracement was very strong, and one has to respect the possibility of a bullish breakout, if not to parity, to a resistance pivot near 0.9970.

Bearish outlook: Otherwise, further bearish correction has room toward the 61.8% retracement level at 0.9842, which is near a rising trendline (this trendline is likely to be near higher if price turns down tow it). a break below the trendline introduces bearish outlook, and clearing below 0.9840 gives more weight to it.

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.

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