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Currencies CAD Bullish USDCAD breaks above major resistance level

alpariThe USDCAD pair has broken above a major resistance level of 1.13, following the continuation of the uptrend that has been in place since 2011. This follows continued downside in the price of oil, as the Canadian dollar suffers and with today’s break and the likeliness of further losses in oil along with today’s break in USDCAD means that I expect to see a strong move higher in the coming months.

On the weekly chart, there is a clear uptrend that has been in place since mid 2011 which has been supported by the green ascending trendline. The current move higher is looking tot take the pair onto it’s next leg higher, with the break above the 1.13 level crucial to this. 161014dOn the daily chart, it is clear that the pair has not only cleared out a previous swing high (reaching a 5 year high) but also the inverse head and shoulders projection of 1.13. This break higher provides us with not only a textbook breakout from a period of consolidation but also a move in the direction of a long term trend that is backed by fundamentals. As long as price remains above 1.13 and the daily candle closes convincingly above that level, I am bullish for a move higher, where the major resistance levels are around 1.166, 1.172 and 1.189. Given how far away those levels are, it shows how difficult it is to find targets in such a move due to the long term high being created. With that in mind, I am less sure about where this trend will end, yet for the time being I believe we could be in for a move higher for an extended period of time.161014e

About Joshua Mahony

josh mahonyJoshua Mahony is Research Analyst at Alpari UK. Having joined in 2012, Josh’s previous experience in the industry includes time spent on the trading floor at Barclays Capital and working for Deutsche Bank in New York for a year. Originally coming from an economics background, Josh then traded equities in the wake of the 2007/2008 financial crisis. He is now turning that experience towards the forex markets. Josh writes market commentary that has featured on websites and publications including the Financial Times, Reuters, the Guardian, ABC News, CityAM, the Washington Post and the Miami Herald. You can follow Josh’s analysis on Twitter, and Google+

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