USD/CAD at 1.05; Stalking for Topping Action
Wednesday, September 8, 2010
, Posted by Usman Ali Minhas at 8:33 AM
USD/CAD at 1.05; Stalking for Topping Action
- 4H: The USD/CAD was seen rallying towards 1.05 in yesterday’s USD/CAD update.This was going to be a pullback to the previous support now tested as resistance.
- The market is there at the beginning of the US session, so let’s stalk this market for topping action using the 15-min charts.
- 15-min: As I drew on the invalidating scenario and the confirming scenario, the market in the 15-min chart is moving below 1.0450, which was the support of the recent consolidation range.
- If the market can offer a pullback that fails to break into this consolidation zone, we have a bearish attempt at hand.
- Also, the RSI should break below 40, and preferably break below 30. A RSI rally that fails to break above 50 also hints at imminent attempt at the bearish scenario.
- Day: When the market was rejected from staying above 1.0650 it suggested it wanted to return to equilibrium of the range.
- Now the market might be saying that it respects the topping area between 1.05 and 1.0650. If so, it is now more likely it will decline below 61.8% retracement level at 1.0325. Instead the 1.02 area can become the target.
- Still, the market is ranging and not bearish, so it may also be prudent to have an emergency exit strategy.
