1.34 is critical resistance:
- You can call this a wedge, or a channel - the point is that price is tagging the projected resistance.
- This area just under 1.34 is also a resistance zone going back to August 2015.
- The prevailing choppiness warns that a bearish swing could be next.
- However, the fact that price has been able to come up above the cluster of 200-, 100-, and 50-day simple moving averages (SMAs) suggest that there is a potential of turning bullish.
- Perhaps there is a threshold at 1.34, above which the mode would switch from choppy to a sharper bullish push.
- In this scenario, I would first look for targets at 1.3635 and 1.38. 1.40 would be the most aggressive bullish outlook for a clear break above 1.34.
1.30 is critical support:
- Now, if price retreats further from 1.34, it means USD/CAD is still choppy.
- But, the prevailing bullish component of price action suggests that the pair should hold above 1.30.
- A break below 1.2990-1.30 on the other hand would break the bullish channel/wedge and would open up the bearish outlook.
- Most likely, if USD/CAD is indeed bullish, it should find support around 1.3150, a support.resistance pivot area seen in the 4H chart.
- If the market does hold USD/CAD above 1.3150, I would be more confident that it would eventually break 1.34 and push higher in a sharp manner.
USD/CAD 4H Chart 10/25
(click to enlarge)