USD/CAD 4H Chart 9:40AM EDT 11/16/2012


Consolidation: Following up with the previous update, the USD/CAD has been floating around, consolidating around the larger consolidation’s resistance area. The 4H chart shows the slightly tilted up channel formed around the parity level. As the 11/16 US session got underway, the pair is testing the small consolidation lows, near the parity level. Will the 1.00 level hold?

Parity: If the market breaks below parity, it does lose some bullishness. But keep in mind we are in consolidation, so the bearish outlook is not really in play yet. In the near-term, the central pivot area in the 4H chart around 0.9945-0.9959 should be monitored. Ability to hold above this area maintains a bullish bias.

Breakout scenarios:
A break to the upside, above 1.0040 continues a bullish market that started from the 0.9631 low in September. This bullish outlook has the 2012-high near 1.0444 in sight. The bearish outlook opens up if the market breaks below 0.9870, opening up the 0.9631 low.