- The USD/CAD monthly chart shows the rally from 0.9633 (November 2012 low) has resumed.
- The bullish breakout adds puts focus back on the golden crossover (bullish crossover between 50-month MA and 200-month MA) confirmed in April/May 2017.
Currently, the USD/CAD pair is trading at 1.3322, having clocked a month low of 1.2856 on June 6 and a monthly high of 1.3382 on June 22, respectively.
Monthly chart
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The pair looks set to close the current month well above 1.3070 (flag resistance). So, a bull flag breakout looks like a done deal.
The bullish continuation pattern indicates the rally from the November 2012 of 0.9633 has resumed and has opened the doors to 1.65 (target as per the measured height method, i.e. pole height added to breakout price).
While the bull breakout target looks far-fetched, the rally to 1.40 (psychological level by year-end looks feasible.
Other chart factors are also biased toward the bulls. For instance, 5-month and 10-month moving average (MA) are trending north – indicating a bullish setup.
The bullish flag breakout also adds credence to the golden crossover (the bullish cross between 50-month and 200-month MA seen in April/May 2017).
The 14-month relative strength index (RSI) is above 50.00 (in the bullish territory) and pointing north, having breached the falling trendline in April.
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USD/CAD looks set to end the current month above 1.3070, confirming a bull flag breakout.
The currency pair is seen rising to 1.40 (psychological hurdle) before the year-end.
A break below the ascending (bullish) 50-month MA would abort the long-run bullish view. At press time, the 50-month MA is located at 1.2696.
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