USD/CAD Trading at the 2013 Trendline Support and 38.2% Retracement

by Admin

Awards 2013

USD/CAD 4H chart 3/28/2013 8:38AM EST

USDCAD

Rounded top: Looking at the 4H USD/CAD chart, it looks like the pair has been coming off a rounded top. You can even say its at the “handle” of an inverted “cup-and-handle”. The 4H RSI shows bearish momentum born when the reading tagged 30 on the 15th, and also showed ability to maintain this momentum when the reading held under 60. If it can push to 30 again, it would be a sign of persistent bearish momentum.

Support factors: The USD/CAD is challenging the 2013 uptrend, but has not clearly broken it. A rising trendline from the 2013 low of 0.9814 still holds. There is also a 38.2% retracement at 1.01395 where there could be at least some near-term support especially when in confluence with the rising TL. Also note that there is a bit of bullish divergence in the 4H price and RSI readings.

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.