USDCAD—basing

USDCAD's behavior indicates a price base in the 9978/29 zone. In addition, unless price closes near that zone, the November candle on the monthly chart will be a hammer. Since its shadow low is at support it strengthens the pattern. RSI on the monthly chart has maintained good levels as well which hints the trend is turning to bullish. Hard to believe, I know, and there are certainly no guarantees with the banana republic economics that seems to pass for economic policy in the US but I can only report on what I see on the chart.

The pair is currently nearing its November high of 1.0262 so one could buy on a pullback or a break of that price. Stops will depend on risk/reward calculations but shouldn't be below 1.0095.

Here's the monthly chart:










© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

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