USD/CAD: It has been over a year since the market has managed a close above the 200-Day SMA, and the latest impressive surge has finally opened a break back above the longer-term moving average to potentially warn of a major shift in the structural outlook of the pair. We have consistently advocated for a higher rate, even with the market dropping below parity, and the recent move back above 1.0500 helps to solidify our bullish bias. The latest upside surge also seems to threaten the integrity of a downtrend from 2009, and a break of 1.0780 is what will be needed to force an acceleration of gains and officially confirm a shift in the longer-term structure. Look for any setbacks to now be well supported ahead of 1.0400.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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