Critical Support Level for USD/CAD

07/24/2009 12:01 am EST

Focus: FOREX

James Chen

Chief Technical Strategist, FX Solutions


Click to Enlarge
(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)

Steeply bearish price action within the last couple of weeks on USD/CAD, a daily chart of which is shown, has brought price down from a 38.2% Fibonacci retracement (measured off the long bearish run from 1.3060 to 1.0780) to approach the downtrend lows once again.

The major immediate downside support target for the current bearishness resides in the 1.0800 support/resistance price region, which represents the area of the downtrend lows. Any substantial breakdown below that level would confirm a downtrend continuation potentially targeting further key support around 1.0550.

By James Chen, Chief Technical Analyst, FX Solutions

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