By: Mike Kulej
So far this week, currencies have been behaving in a choppy manner. It seems like every economic news release caused a change in direction, lasting few hours, perhaps half a day, only to reverse again in response to the next announcement.
On most intermediate term charts this action created large congestion zones. However, on some of them, like the USD/CAD, a trend is still discernable. This pair continues a mid-term bullish trend, even if it is difficult to detect in the midst of recent choppiness.
In early May, the USD/CAD made a low of 0.9444 and has been climbing since. It has made a series of higher highs and higher lows. After the latest high of 0.9897, the price dipped to 0.9699 where it stopped at the trendline. As of right now, we cannot call it a low within the trend yet – it will become one when (if) the price makes another high.
Since the trendline and the latest low hold, the chances are that the USD/CAD will remain in the uptrend. If the price moves above 0.9900, we can expect a test of the next important resistance at just under the parity (not visible on this chart). As subtle as it is, the bullish trend continues.