Dollar/CAD Setup for Rally to 1.0262

Fundamentally, the recent decision from the Bank of Canadato refrain from an interest rate hike and its forecast for a slow down ineconomic growth may be underpinning the USD CAD.

Fundamentally, the recent decision from the Bank of Canadato refrain from an interest rate hike and its forecast for a slow down ineconomic growth may be underpinning the USD CAD.

Furthermore, the rally began shortly after the Dollar/CADbriefly penetrated parity, which is typically a natural buying area. Additionalsupport may be being supplied by weaker gold and crude oil prices.

Technically this currency pair has formed a support baseafter a few tests of a 50% level at 1.0176. This price is inside the main rangeof .9979 to 1.0373. A failure to hold this price could mean a test of the Fibretracement level at 1.0129 however an uptrending Gann angle at 1.0158 may preventthis market from reaching this level.

On the upside, further confusion over how much quantitativeeasing the Fed will implement and how it intends to distribute the money may besupportive for the U.S. Dollar. This could trigger a rally into a downtrendingGann angle at 1.0262, before a further rally into a 50% level at 1.0325.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

Disclainer: