Forex FX: USD/CAD Technical Analysis WC 26th November
(Forex-FX-4x.com, US Dollar/Canadian Dollar Technical Report, 25th November 2012)
- Recap of the recent USD/CAD price action:
The US/Canadian dollar rate appreciated earlier in the month, but has subsequently edged lower. We note that price has moved to the downside after finding resistance just above parity. Our previous update noted that the initial technical level, on a break above parity, was the 1.0051 area “price pivot zone” which is roughly aligned with a 50% retrace level. Price subsequently moved as high as 1.0055 on the 16/11/12, following the update, and is now trading around 120 pips lower.
USDCAD Technical Analysis Overview
- The aforementioned 16/11/12 bearish reversal coincided with the dollar index (USDX) reversal, as highlighted in this week’s dollar index analysis post. The US dollar index is now back near previous resistance, which may see an element of greenback support.
- When referencing recent currency correlation data we note that only the Japanese yen was weaker than the Canadian dollar over the past week.
- Price came within a few pips of hitting the embryonic trend line on Friday, as shown on the (fig 1) USDCAD chart below, before correcting marginally higher.
- Any additional downside brings the 38.2% Fibonacci retrace area and price pivot zone into focus around 0.9890.
- We will be monitoring both of the aforementioned potential support area’s going forward, with a particular focus on the daily candle close.
- Price is still working in the context of recent higher lows, with a move below 0.9873, the 7/11/12 daily low needed to see a constructive technical development and invalidate the sequence.
- Initial resistance may be found around the multi day lows circa 0.9950 . Any extended upside move has us monitoring the parity area once again.
US Dollar/Canadian Dollar Analysis – Figure 2
(Forex-FX-4x.com, US Dollar/Canadian Dollar Outlook, Week Of 26th November 2012)