By Mohammed Isah of fxtechstrategy.com
: The pair could be shaping up for a second day of higher closes after turning higher off the 1.0204 low on Thursday and following through to the upside today. As indicated in our long-term analysis, the pair's congestion zone, between the 1.0332 and 0.9800 levels, must be decisively cleared to allow for medium-term trend continuation.
Correction at this stage is expected, after declining sharply and quickly for many weeks. Resistance is seen at the 1.0590 level, with a break of it setting the stage for a move higher, targeting the 1.0991 level, its Sept. 27 high, and next the 1.1123, its Aug. 17 high.
We envisage that the 1.0590 should reverse roles and provide resistance by turning the pair lower again. Downside objective starts at the 1.0204 level, with a violation there resuming USD-CAD's medium-term downtrend toward the 1.0100 level, and then its parity level at 1.0000. On the whole, though medium-term bearish, the pair now looks to correct its recent declines.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.