USD/CAD 4H Chart: Channel Up

Source: Dukascopy Bank SA
© Dukascopy Bank SA
USD/CAD is currently trading in a well-defined ascending channel, which implies a bullish outlook. However, there are plenty of reasons to doubt the ability of the US Dollar to appreciate in the longer term. For one, the Greenback is heavily overbought—71% of open positions are long. At the same time, a half of the weekly technical indicators is pointing south. Finally, there is a massive resistance area circa 1.33, consisting of the upper bound of the pattern, 38.2% Fibonacci retracement of the January - May down-move and the 200-day SMA. Accordingly, a bearish rejection here may well extend through the key supports 1.30 and 1.2950, and the pair will thus break out of the pattern.
© Dukascopy Bank SA
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