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USD/CAD: Lots Of Upside Mo

ByThe Pattern, Price & Time Report
AuthorJames Hyerczyk
Published 05/17/2012, 09:22 AM
Updated 05/14/2017, 06:45 AM
USD/CAD
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This week the USD/CAD broke to the upside of a down-trending Gann angle from October 2011's main top at 1.0657. The breakout triggered an acceleration to the upside, setting up a potential short-term rally into a key retracement zone.

Let’s look at the technical breakdown. The main range is .9406 to 1.0657, with a retracement zone at 1.0032 to .9884. This area was tested for a prolonged period as prices consolidated before the breakout. The short-term range is 1.0657 to .9799, which has formed a retracement zone at 1.0223 to 1.0329. If the upside momentum continues, that will be the next potential target zone.
Weekly-USD-CAD-Chart
In addition to the upside breakout through the 50% price level at 1.0032, the USD/CAD also crossed to the bullish side of a down-trending Gann angle at 1.0017. If the Rule of All Angles holds true, the next target is the flatter, down-trending Gann angle at 1.0337. A strong rally could lead the market to test a resistance cluster at 1.0329 to 1.0337 (Red Arrow).

Now that the main trend is up, the market may begin to walk up an up-trending Gann angle at .9919 this week (Blue Arrow).

In summary, the fundamentals are clearly on the side of the U.S. dollar. This is giving investors the clarity and conviction to aggressively trade the long side of the USD/CAD currency pair.

This week’s breakout over a previous resistance angle set a bullish tone for the week. The next upside target is 1.0329 to 1.0337. Although the definition of an uptrend is higher-tops and higher-bottoms, an up-trending Gann angle at .9919 should act as a strong support guide.

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