USD/CAD technical analysis for February 17, 2011

Support levels: 0.9830,0.9780, 0.9711
Resistance levels: 1.0000, 1.0057, 1.0212


On a 4-hour graph the USD/CAD currency pair is demonstrating downside movement with a target at 0.9830. Nevertheless, the currency pair will probably continue trading between 0.9830 and 0.9900, at the same time the interest to purchase will be strong near the upper and the lower limits of this range.
Break of the upper limit might cause some purchases and provoke a growth to 0.9940, while break of the lower limit will probably make the dollar test the support level 0.9780.
In general, technical factors help the USD/CAD pair keep in the trading range after recent rebound off the 0.9850 level.
However, if the support level 0.9930 is not broken, this might result in advance of the US dollar. If the USD/CAD breaks the 1.0057 resistance level, further advance to 1.0212 should be expected. Further break of the 1.0380 level will denote that the rollback from 1.0680 is completed and further growth should be expected.
In the midterm the breakout of the support level at 0.9930 indicated continuing midterm downtrend from 1.3063 (2009 high) with 0.9700 as a target. However, this downside movement is probably a correction, and a strong support level is located near 0.9056-0.9700.
Thus, if a reversal takes place, the breakout of 1.0851 will prove the downtrend broken through from 1.3063. In this case the USD/CAD is expected to go up to the resistance level 1.1126 with 1.1866 as the next target.

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