7 Jun 2013
Flash: Initial resistance in USD/CAD remains at 1.0295 - TDS
FXstreet.com (Barcelona) - Short-tem price moves turned a little more negative for USD/CAD earlier in the week, when spot dropped below support in the 1.03 area, presaging—we thought—more weakness, noted Sean Osborne, Chief FX Strategist at TD Securities.
Osborne went on to comment, “the USD was having none of that though and the Head & Shoulders top formation we thought was forming (opening the door for a drop to the upper 1.01 area) has failed to generate any downside follow through selling. With the market trading fairly consistently above 1.03 since that initial wobble, we have to consider the risk of a drop back below 1.02 now as more remote, at least in the near-term.”
On a final note Osborne concluded, “from a broader point of view, the long-term charts do not remove the risk of renewed weakness in USD/CAD entirely but there is still strong, underlying bull trend momentum evident in this market, which limits downside risks (as per the above) and suggests that the overall trend remains firmer. Major daily/weekly trend resistance (now support) at 1.0295 now is intact and, having been tested and rejected, now represents key short/medium-term support. Stay bullish above here.
Osborne went on to comment, “the USD was having none of that though and the Head & Shoulders top formation we thought was forming (opening the door for a drop to the upper 1.01 area) has failed to generate any downside follow through selling. With the market trading fairly consistently above 1.03 since that initial wobble, we have to consider the risk of a drop back below 1.02 now as more remote, at least in the near-term.”
On a final note Osborne concluded, “from a broader point of view, the long-term charts do not remove the risk of renewed weakness in USD/CAD entirely but there is still strong, underlying bull trend momentum evident in this market, which limits downside risks (as per the above) and suggests that the overall trend remains firmer. Major daily/weekly trend resistance (now support) at 1.0295 now is intact and, having been tested and rejected, now represents key short/medium-term support. Stay bullish above here.