(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; 50-period simple moving average in light blue.)
4/08/2009 € USD/CAD € Price action on USD/CAD, a daily chart of which is shown, has recently been forming a converging consolidation of progressively decreasing volatility. This triangle-like consolidation is bordered to the downside by a very significant uptrend support line with at least five touches, extending from a low in mid-October. To the upside, the converging consolidation is bordered by a downtrend resistance line extending from the fourth test of the 1.3 high in mid-March. Currently, price is wavering near the bottom of the consolidation. Any significant break to the downside of the uptrend support line could target strong further support around the important 1.2000 support/resistance price region. To the upside, the noted downtrend resistance line should provide strong resistance as the top of the current consolidation. Any break above this dynamic resistance should meet further major resistance in the 1.2700 price region.
James Chen, CMT
Chief Technical Strategist
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