USDCAD Technical Analysis for May 23, 2013

In yesterday’s session, the loonie had a big bullish momentum, leading to break strong resistance on the road.

The USDCAD finally completed a lower high pattern, that had formed below the resistance level 1.0286, a level of vital importance because this pair tried to break it weeks ago, without success. The loonie took a new “breathing space” to have rebounded from the moving average of 200 a few weeks ago and now is near resistance at 1.0400 psychological level. If the USDCAD breaks this important resistance, it’s expected to rise to the psychological level at 1.0500. In case the loonie find strong resistance at 1.0400, the bearish rebound would not be so deep and should not fall below the support at the 1.0286 level. It is very likely that this pair begins to enter a phase of consolidation.

The MACD indicator remains in positive territory but is approaching overbought significant levels, which could indicate that this pair will move in a low range for the rest of the week.

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