A surge higher Tuesday to reinforce our bull view after cautious digestion activity to start the week, which held above the trend line support, now 1.1965 to provide a strong base.
This has reinforced the prior break through a key impulse low from 2009 at 1.1981 and the psychological/ option target at 1.2000 and the previous surge above the 61.8% retrace of the entire 2009-11 sell off at 1.1655 and a key weekly failure peak from 2009 at 1.1727.
The strong rebound, rally and extension leaves risk for a further bullish extension into the 2nd half of January.
Short-term Outlook - Upside Risks
- We see upside risk for January is to the 78.6% retrace of the entire 2009-11 sell off at 1.2280.
- Above sees threat to a key weekly peak from 2009 at 1.2507.
Momentum: The 8-day RSI, short-term momentum is corrected from OB, to see scope to go higher this week.
What Changes This? Below 1.1792 eases bull risks; through 1.1730 signals a neutral tone, quickly shifting negative below 1.1560.
- Above 1.2116 sees an upside bias for 1.2145; break here aims for 1.2190.
- But below 1.2050/40, aims for 1.2000 and maybe trend line support (1.1965).
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