USD/CAD has broken down through key support, which was also part of the larger triangle pattern structure.
Watch for a test of the 200-day average which is currently trading at 0.9950. Only a break beneath here will target 0.9890.
Meanwhile, the bulls need to push back above 1.0250 and 1.0425, in order to resume the potential larger cycle recovery.
In terms of the big picture, a directional confirmation above 1.0680 is still needed to unlock the recovery into 1.0850 plus. This would extend the upside breakout from the rate’s ending triangle pattern, which was part of a major Elliott wave cycle (see top-left chart insert).
EUR/CAD, which tends to share a positive correlation with EUR/USD, is mildly extending its gains. However, the previous structural breach under the rate’s multi-month distribution pattern continues to favour downside pressure into 1.2760 (10th Jan 2010).
Daily Technical Report
