The USD/CAD has twisting and turning, but is in a bullish tilt since March 19. Observe the market establishing higher lows and higher highs, the latest being a test of the March high at about 1.0030. However, after another higher low, the market now rallies back toward the parity level. If the current bullish bias follows through, we can be approaching a more significant resistance level at 1.0050.
The daily chart shows that the 1.0050 area indeed provided both support and resistance. Lately broken in January, it has acted as resistance during the consolidation that started in February 2012 and has not ended. A clear break above 1.0050 would be the first clue that the market is entering a bullish mode after the bearish one since Nov. 2011. If the market can then stay above 0.9950 and push above 1.0100, we would be seeing a bullish development, especially if the daily RSI reading also pushes above 70. Otherwise, we might continue to maintain a bearish to sideways outlook.
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