USD/CAD Outlook – 2012/10/03
October 2, 2012 in Forex Analysis
USD/CAD’s Broke Over The Resistance After 12 Weeks
USD/CAD had broken over the Tenkan line resistance level after over 12 weeks. Well, an important resistance break after 12 weeks need some attention.
Please check the weekly chart of USD/CAD with Ichimoku cloud:
Let’s have a look on the trend lines also on weekly chart of USD/CAD:
And now a glance on the Fibonacci setup on the weekly chart:
The break of Tenkan line resistance after such a long time comes as an indication that we should expect some further upward consolidation. Please note that after the break the currency pair had managed to have the weekly closing above that resistance and the price action in the subsequent week i.e. the current one has also been above that level. Moreover the downward move had found the support just over the previous resistance level of Tenkan line and that suggests that the old resistance may have now turned into the support level. Please check the current and previous candles on the first chart of USD/CAD above.
Now if we consider a possible 38.2% retracement then with a break over 98.60, the next move may be towards 99.50. This level would also represent a very strong resistance zone during whole of August. The currency pair had keep hesitating near and below this level and after a sideways move near 99.50, USD/CAD had fallen again sharply.
In case the US Dollar – Canadian Dollar pair manages a decisive break over the said 99.50/99.60 level and sustains above that for at least a week or so then the next move could be a break over the parity i.e. 1.0000. Please check the Ichimoku cloud chart which shows the next resistance level near 1.0020 where the resistance of the lower edge of a very thin cloud would come into the picture.
The above Outlook would stand good if USD/CAD keeps on finding support at or over 0.9768.
Read about Ichimoku cloud .