Technical analysis of the USD/CAD for December 22, 2010

On a 4-hour graph the USD/CAD is making a rebound after it failed to break the support level 1.0212. Earlier the USD/CAD rebounded from the support level of 1.0000, which is also a bottom of a wide trading range.
The uprising movement is supported by the fact that on a 4-hour chart the MACD divergence appeared. As it was mentioned before, if the USD/CAD breaks through the level of 1.0290, then this will lead to uprising movement with a target to 1.0380. The breakthrough of 1.0380 will mean that a pullback from 1.0680 ended and further advance should be expected. Moreover, a breakout of 1.0380 will indicate the formation of “Triple Bottom”.
Nonetheless, a breakthrough of support level of 0.9980-1.0000 will allow the pair to reach the 0.9930 level.
In a midterm, the currency pair will probably remain within the bounds of its wide range between 1.0000 and 1.0750-1.0850. In case the reversal takes place, then the breakout of 1.0680 will confirm the end of consolidation and that the downtrend from 1.3063 is breached. In this case it is forecasted that the USD/CAD will move up to the Fibonacci correction level 38.2 from 1.3063 to 0.9929 at 1.1126 with the next target to the Fibonacci correction level 61.8 at 1.1866.

Support levels: 1.0000, 0.9980, 0.9930
Resistance levels: 1.0167, 1.0290, 1.0380

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