sell 1.1470 , SL 1.1545 , TP 1.1285 and reverse
Since this year"s low at 1.0930 scored in May, USD/CAD has
been trying to grind its way higher and last week managed to clear the major
swing high from July 24 at 1.1460. So far, follow-through has been limited to
1.1480 due to short-term overbought forces. Hourly studies were overbought
during Friday"s initial breakout attempt and daily studies remain overbought to
begin the new week. Some daily studies are also flashing bearish divergence
warnings, but prices would have to begin making new daily lows to confirm them.
Friday"s 1.1405 low has thus far held up.
Pulling back a bit from the day-to-day price action, we see that a downtrend
line dating back to last November"s 1.1975 high was removed by last week"s
rally, and is now at 1.1432. If prices can hold above that trendline this week,
despite bearish pressures from overbought daily charts, then the breakout beyond
1.1460 will look even more convincing. Of course a pullback to correct
overbought dailies would not necessarily negate the broader bull market pattern
unless it extended below the uptrend drawn off of the 1.0930 multi-year low from
May, now at 1.1115. The daily uptrend has been accelerating since the September
1 swing low at 1.1030, with the most recent daily uptrend line at 1.1420. Often
developing long-term reversals will use the 200-day moving average line as a
backstop after crossing back through it in the direction of the reversal. That
support is at 1.1285 today and a possible daily uptrend correction target.
On the monthly charts, all the downtrend lines from the move that began with the
January 2002 peak at 1.6190 have been eradicated and a massive bottom looks to
have formed this year, with the month studies all rebounding from deep in
oversold territory. The whole collapse from 1.6190 to 1.0930 appears to be an
ABC correction, with the 50% retracement of it at 1.3560 and a reasonable long-
term target for the major uptrend getting underway this year.
The bottom line is that even if prices were to fall back a bit near-term to
correct overbought daily studies, the longer term uptrend is likely to prevail
and accumulation should occur on such dips. The 1.1535 high from Arpil of this
year is the next upside breakout point, with 1.1775 then the next objective.
Since this year"s low at 1.0930 scored in May, USD/CAD has
been trying to grind its way higher and last week managed to clear the major
swing high from July 24 at 1.1460. So far, follow-through has been limited to
1.1480 due to short-term overbought forces. Hourly studies were overbought
during Friday"s initial breakout attempt and daily studies remain overbought to
begin the new week. Some daily studies are also flashing bearish divergence
warnings, but prices would have to begin making new daily lows to confirm them.
Friday"s 1.1405 low has thus far held up.
Pulling back a bit from the day-to-day price action, we see that a downtrend
line dating back to last November"s 1.1975 high was removed by last week"s
rally, and is now at 1.1432. If prices can hold above that trendline this week,
despite bearish pressures from overbought daily charts, then the breakout beyond
1.1460 will look even more convincing. Of course a pullback to correct
overbought dailies would not necessarily negate the broader bull market pattern
unless it extended below the uptrend drawn off of the 1.0930 multi-year low from
May, now at 1.1115. The daily uptrend has been accelerating since the September
1 swing low at 1.1030, with the most recent daily uptrend line at 1.1420. Often
developing long-term reversals will use the 200-day moving average line as a
backstop after crossing back through it in the direction of the reversal. That
support is at 1.1285 today and a possible daily uptrend correction target.
On the monthly charts, all the downtrend lines from the move that began with the
January 2002 peak at 1.6190 have been eradicated and a massive bottom looks to
have formed this year, with the month studies all rebounding from deep in
oversold territory. The whole collapse from 1.6190 to 1.0930 appears to be an
ABC correction, with the 50% retracement of it at 1.3560 and a reasonable long-
term target for the major uptrend getting underway this year.
The bottom line is that even if prices were to fall back a bit near-term to
correct overbought daily studies, the longer term uptrend is likely to prevail
and accumulation should occur on such dips. The 1.1535 high from Arpil of this
year is the next upside breakout point, with 1.1775 then the next objective.