USD/CAD Analysis Suggests Upside
09/30/2010 12:01 am EST
The USD/CAD currency pair continues to respect its summer range. The June, July, and August highs all occurred within several pips of 10680. A multi-month support line is holding now (that line might be a triangle line). At minimum, I am looking higher to 10515 in wave e of a triangle. A more bullish count is shown above in which a break above 10860 is expected. As the rally plays out, we should have a better idea of what to expect.
Additionally, USD/CAD has put in a bullish engulfing candlestick pattern above horizontal support at 1.0245, the August 19 low, having taken out a minor falling trend line established from the late-August swing top. However, risk/reward considerations argue against entering long at this point, and we will remain on the sidelines looking for a more attractive entry down the road.
By Jamie Saettele and Ilya Spivak of DailyFX.com