USDCAD – Test of trend channel resistance is on cards

A larger corrective trend started from 0.9405 (July’11 low) appears to be still in force which may be flat corrective wave. A retest of the 1.0510/1.0655 resistance on multi-month basis is possible. The medium term setback from 1.0450 (June high) has the potential to retest the major swing low at 0.9405. A reversal above 1.0000/1.0085 would refocus on 1.0230/1.0450 ahead of 1.0510. A break below 0.9405 however targets 0.9300/0.9060 next.

The pair is attempting to recover from 0.9630 with a break of daily RSI trend line resistance. The key resistance zone at 0.9915/0.9950 is likely to be tested in the near term (watch the trend channel resistance) where bears would fight back. The 0.9720/0.9630 support looks to hold now. A break below however would renew bears for 0.9500/0.9400. A reversal above 0.9950 extends recovery toward 1.0000

Anantharajan .P, CMT (Technical Strategist, Precise Trader)