USD/CAD’s May low at .9448 most likely marks the end of its 2009-2011 bear market with the 1.0208 2009 trough being the six month upside targets and the 200 week moving average at 1.0592 being the one year upside target.
The currency pair has evolved in a clearly defined minor uptrend channel over the past six weeks or so and has been trading above the 55 day moving average and the breached 2010-11 resistance line at .9666/27 for all of June. This leads us to believe that a major reversal higher is now in the making. The 200 day moving average at .9920 will need to be overcome on a weekly basis for such a reversal to be confirmed, however.
In the short term another drop towards the .96/.95 region could be witnessed since negative divergence can be detected on the daily RSI. The May low at .9448 should not be slipped through, however.
Provided that it underpins, a rise to the psychological parity level should be seen. Here it will most likely struggle for several weeks, if not months, before rising further.
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Technical Research