FX.co ★ Technical analysis of USD/CAD for January 31, 2014

General overview for 31/01/2014 10:00 CET

Not much of impulsive price development so far on hourly chart can be spotted. Instead of that, the golden trend line has been tested and so far the price has bounced from it and it is trying to break out higher. The key level is 1.1198 as the last swing high and the next important resistance is at the level of 1.1303. Please notice that the bearish divergence had been formed on H1,H4 and Daily time frames, so the pull back or correction seems imminent when wave (v) is completed.

Support/Resistance

1.1303 - WR2

1.1198 - Swing High

1.1185 - WR1

1.1181 - Technical Support

Trading recommendations:

Break out above the level of 1.1198 is bullish as the market will try to complete the last wave of the ending diagonal formation. Buy stop orders should be opened from that level with SL below the level of 1.1148 and TP at the level of 1.1303.