Bearish Trend in USD/CAD Daily Chart
05/05/2009 9:40 am EST
Price action on USD/CAD, a daily chart of which is shown above, exhibited substantial bearishness in the past week which now appears to be extending to the current week. After respecting a relatively new downtrend resistance line extending from the fourth test of the 1.3 high back in early March, price subsequently dropped swiftly below the key 1.2000 support/resistance level, and dropped further on Monday morning (5/4/2009) to make a tentative breach of the equally significant 1.1800 support region.
Continued bearish price action could eventually target key support in the 1.1465 price region. Upside resistance within the context of the current downtrend continues to reside around the psychologically important 1.2000 support/resistance level.
By James Chen, Chief Technical Analyst, FX Solutions