Forex Video Briefing (9/29) – USD/CAD, CAD/JPY

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[videojs mp4=”http://s3.amazonaws.com/fxcom-amazon-s3/2014/09/AheadofCanadaGDPData1.mp4″]
Forex Video Briefing (9/29) – USD/CAD, CAD/JPY

The 1H USD/CAD chart shows a market completing a head and shoulders pattern and breaking below a rising trendline. However, we are seeing buyers in the 1.1130 area. 1.1120-1.1130 was a previous resistance area, and includes the 50-hour simple moving average. A break below 1.1120 with the 1H RSI falling below 40 would be needed to signal a bearish correction. 1.1050 will be the next a key area ahead of the GDP data and even after it. If price falls below 1.1050, it will likely clear below the 200-hour SMA and a previous support/resistance pivot. However, if price can hold above 1.1050, the bullish outlook is still in play, and the 2014-high at 1.1278 would still be in sight. A break below 1.1050 simply puts USD/CAD into a consolidation mode, with downside risk toward the 1.0950-1.10 area.

CAD/JPY is consolidating in the 1H chart. When we look at the 4H chart, we can see that it is consolidating after a bullish trend. The moving averages and the RSI suggest the market is still bullish. It should be noted that CAD/JPY is just coming off a new high on the year in September at 99.81. Also, there is room toward the 2013-high in the 101-101.05 area. Back to the 4H chart, we can see that the current consolidation around 98.00 is breaking a rising trendline from August, but it is not a bearish break, but rather a sideways one. Price is still above the 100-period SMA. After the GDP data, if CAD/JPY rises above 98.73 the bullish continuation scenario is in play with the 99.81 and 101.00 levels in sight.

A break below 97.65 clears below a recent support/resistance pivot and opens up the 96.50 level, another support/reisstance pivot and where the 200-period SMA in the 4H chart resides.

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Jonathan Millet is currently the proud CEO of ForexMinute.com, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers. He also holds the position of Binary Options Consultant at ForexMinute.com. Before ForexMinute.com was around, Jonathan was a successful Forex dealer and chief market analyst at Forexyard. He has also worked as a Forex trader. His other specialties include advising financial companies of how to stay head of the competition.