USDCAD – Forming a bullish flag pattern?
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 1.0010/1.0100 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 has been maintaining a tight range for past three weeks. The pattern appears to be a bullish flag continuation pattern. In Elliot terms, it could be wave (b) symmetrical triangle. A break above 0.9890 would resolve pattern and extend corrective rally toward 0.9950/1.0010. The Flag base 0.9760/0.9730 looks to hold in the near term. A break below 0.9730/0.9630 however would renew bears for 0.9500/0.9400.
