USD/CAD Gains Capped Beneath Key Resistance At 1.0284

By: MIG Bank | Wed, May 30, 2012
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USD/CAD’s latest bullish breakout is failing into key resistance at 1.0284. The move is also showing signs of price exhaustion after retracing over 76.4% of the YTD decline, following the breakout above its 200-day average and multi-month triangle pattern (see daily chart).

While we could see some corrective downside to unwind the latest surge higher, a successful charge above 1.0284 would help resume the larger cycle recovery higher into 1.0424 (14th December high).

Meanwhile, only a decisive break back beneath 0.9960 and 0.9776 would reinstate the multi-month downtrend into next support at 0.9726.

EUR/CAD, which shares a high correlation with EUR/USD has snapped back lower, following a false upside break. However, the rate’s price performance is lagging behind as it has yet to trigger a new 2012 low. Watch key support at 1.2784 (16th May low).

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Author: MIG Bank

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