USDCAD - Monthly long-term Overview

The Loonie has been ranging above parity on monthly charts all throughout this year 2010, showing a persistent consolidation on weekly charts following around the middle line of the monthly pitchfork. On Daily charts it is trading inside a falling wedge which would suggest a probability of pulling back towards 1.0250 for a second retest of the recently broken level.

In the last three days USDCAD went for a while below parity making new lows, and is now trading back up barely at 1.000, the pair should retest this most recent break and surpass 1.0200-1.0250 area, where there are several resistances awaiting, to be considered bullish. The longer term overview would suggest a fall down to the monthly pitchfork lower trend line at 0.8050 but in my opinion this could occur after breaking first to the upside and perform at least a 38.2 Fibonacci retracement on the last daily swing low, and possibly turning back to a very strong area of consolidation which lies between 38.2 and 50% (1.0250-1.0330).

(Daily chart assessment taken one hour before US markets open on Monday October 11, 2010)

USDCAD	RES2	RES1	SUP 1	SUP 2	R/R	FORECAST	PRICE ACTION
Monthly	1.6047	1.1043	1.0104	0.9061	1:3	Bullish – Ranging	Consolidation after falling wedge
Weekly	1.3067	1.0587	1.0017	0.9934	1:3	Bullish - Ranging	Consolidation
Daily	1.0858	1.0309	1.0064	0.9991	1:3	Bullish - Ranging	Consolidation