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Fan Yang

USD/CAD Could Continue Bullish Trend Above 1.3150

The USD/CAD has been bullish since making a low of 1.2831 in mid-October. Then, it rallied to about 1.3275. The 4H chart shows that the market in the past week has been in a bearish correction. There is a falling wedge/channel forming. 

USD/CAD 4H Chart 11/4

(click to enlarge)

When we look at the 4H chart, we can see that the USD/CAD is at the juncture, between a short-term rally and a very short-term bearish attempt in the past week. There is really not a strong trend in either direction, although the daily chart shows that the prevailing trend is bullish for most of 2015. This is why I have the bullish bias and consider the current dip a correction. 

Another reason I prefer the bullish outlook is that the 4H RSI is still above 40. It actually formed a bullish divergence against the price lows. Not going to read into this too much, but it does reflect a maintenance of the prevailing bullish momentum. Now, if price pushes above 1.3150, it would put USD/CAD above the cluster of moving averages and the falling speedline. This should be a bullish continuation signal, especially if the 4H RSI also clears above 60. 

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