USD/CAD – A Channel Breakout Followed by a Throwback

by Admin

Awards 2013

USD/CAD 4H Chart 4/16/2013 9:11AM EDT

USDCAD

Channel breakout; target: The USD/CAD has been bullish since last week. Price action pushed above a falling channel resistance reversing the bearish outlook USD/CAD had while in the falling channel. Then so far this week, the pair has been consolidating after the break, and offered a throwback to test the broken channel resistance as support. Will the market confirm the breakout? If so, we open up the bullish outlook toward the 1.0336 and 1.0341 highs.

Support: The channel resistance could be projected as support, but there is some near-term downside risk even in the context of a successful bullish breakout. In the 4H chart, I highlighted an area around 1.0170 I believe should hold as support for the bullish breakout. A push below 1.0150 would convince me the breakout is likely false and the market remains sideways if not bearish.

Also the RSI should hold above 40, preferably above 50 in the bullish continuation scenario.