(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
3/11/2009 € USD/CAD € Price action on USD/CAD, a daily chart of which is shown, made a slight false break of the previously triple-tested 1.3000 resistance region before retreating substantially yesterday. Price hit a high of 1.3061 before succumbing to resistance and falling dramatically. This false break may now be considered a quadruple test and failure at major resistance. If this is indeed the case, we may potentially have seen a top in this currency pair, and attention should now be diverted towards the downside. Immediate support resides around the 1.2700 price region, a breakdown of which would land price near a key uptrend support line extending from the late September lows. Any breakdown of this trendline should target further support in the 1.2400 price region. The displayed Stochastics oscillator, in its emergence below overbought territory, is lending some confirmation to a bullish exhaustion after the quadruple test.
James Chen, CMT
Chief Technical Strategist
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