Achieved Price Objective Two (1.0160). Stop raised to 1.0080.

USD/CAD’s latest bullish breakout above the 200-day average and multi-month triangle pattern (see daily chart) signals further upside recovery. Our model portfolio remains long.

The medium-term bullish scenario now targets resistance at 1.0250, thereby resuming the larger cycle recovery higher into 1.0424 (14th December high).

Meanwhile, only a decisive break back beneath 0.9960 and 0.9776 would resume the multi-month downtrend into next support at 0.9726.

EUR/CAD, which tends to share a positive correlation with EUR/USD, remains negative after breaking its multi-month range onto fresh new lows. Watch for extended setbacks into key support at 1.2760 (2011 swing low).

Achieved Price Objective Two (1.2850). Stop lowered (1.2770), to lock in further profits within our model portfolio, amidst high volatility.

EUR/USD’s multi-month reversal pattern has extended its setback and, as anticipated, now targets 1.2624 (2012 swing low).

However, the slide is still very overstretched and due some temporary unwinding over the next few sessions.

Expect a potential oversold bounce into 1.2910/12 and 1.3000 (psychological level). Only a sustained move above here will help neutralize the extreme market condition.

Inversely, the USD Index recovery has rocketed much higher into key resistance at 81.78 (13th Jan swing high). The move is overbought and due a healthy unwind back into 80.73 (15th March high), then 79.82.

Expect these levels to hold and help re-launch the greenback’s recovery which is still part of the bullish cycle for a move above 81.78.