USD/CAD Reversal Signal
- 4H: The USD/CAD is showing signs of reversal after a strong bullish candle coming out of bottoming price action above the 1.0220 area. At this point, the signal is still a little “naked” or without confirmation. We do have a bullish divergence, and a break of a declining channel as well.
- At least a short-term bullish outlook exists towards the 1.0370 area. But a break above that and further confirmation is required for the intermediate term reversal outlook.
- 1H: Looking at the 1H time-frame to confirm at least the short-term reversal to 1.0370.
- There is a break of the declining channel, and a strong one at that. At the start of the US session, the market is indecisive. There could be a quick correction that could test the 1.02780 or 38.2% retracement level. This is just above the consolidation zone the market broke above.
- Continuation of bullish action after a quick pullback is enough to confirm the short-term outlook towards 1.0370. But as the market is in an established bearish mode, monitor the rally in case it falls short of the projection to the powerline.
Fan Yang
Currency Analyst
Commodity Trading Advisor
