Forex Strategy: USD/CAD Looks To Extend Gains Following Break
- USD/CAD Technical Strategy: longs preferred
- Range on the daily broken (1.0900 – 1.1200)
- Four hour chart warns of intraday declines
USD/CAD has broken out from its recent trading range between 1.0900 and 1.1200 (see daily). The push above resistance comes following a Bullish Engulfing formation near support at 1.1050. In the absence of a bearish reversal signal further gains may be possible. While the next definitive level of resistance is offered by the July 2009 high near 1.17250, expect some interim selling pressure at psychologically-significant levels including 1.1300.
USD/CAD: Breakout Opens Further Gains
Daily Chart - Created Using FXCM Marketscope 2.0
Drilling down to the four hour chart, a Dark Cloud Cover formation is threatening an intraday correction for USD/CAD. However, there has been a muted response to the signal in Asian trading, suggesting declines may be limited. Buyers may act to keep prices supported above the 23.6% Fib Retracement level at 1.12180.
USD/CAD: Dark Cloud Cover Threatens Intraday Correction
4 Hour Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.