USD/CAD Breaks Down the Rising Trendline from January

by Admin

Awards 2013

USD/CAD 4H chart 4/2/2013 8:13AM EST

USDCAD

TL breakdown: USD/CAD consolidated late last week, but started this week falling to a new low since the market found resistance at 1.0340. The bearish price action also broke below 38.2% retracement at 1.0139 and also a rising trendline that started from the 0.9814 low in January. This trendline has held price action bullish throughout the year, and the break signals a reversal.

Target: To the downside, the 50% retracement is at 1.0077 and 6 1.8% retracement at 1.0015. Since the 200-SMA is rising, we don’t have bearish momentum. Therefore, maybe we shouldn’t have a bearish outlook lower than the parity (1.00) level.

At this point a rally above 1.02 could neutralize the near-term bearish outlook. However, USD/CAD will likely need to break above the current counter-trend (falling) resistance before reviving the bullish trend.