Looking at the weekly chart (Figure 2), USD/CAD continues to respect the channel support and resistance lines. We also have a bullish engulfing candlestick pattern after the week’s close, and the Stochastic seems to be forming a bullish crossover. The MACD still remains in bullish territory and if the market continues to move up, expect to see a bullish crossover on the MACD as well.
Forecast: Bullish Bias
The channel is clearly still valid as we have not broken below it yet, and since we are at the bottom of the channel, there is more room upside than down. The bullish divergence as seen on the daily chart on both the MACD and Stochastic both support Friday’s move up, and bullish crossover gives us more confirmation on its bullish momentum. Looking longer term on the weekly, the bullish engulfing candlestick, the MACD, and price still respecting the channel gives us a bullish bias on this pair.