(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.)
6/01/2009 € USD/CAD € Bearish price action on USD/CAD, a daily chart of which is shown, has descended all the way down to strong support around the 1.0800 price region. This support target was reached after a prolonged and primarily one-directional plummet that has been in place since price made a bullish retracement to 1.1800 just around two weeks ago. Overall, this pair is entrenched in a steep and accelerated downtrend that has broken down below numerous support levels in its 2200-pip drop within the last three months. One of these key support levels is a long-term uptrend support line extending from the November 2007 low. Currently at yet another critical support juncture, a clean breakdown below 1.0800 could target further support in the 1.0550 price region. Upside resistance within the context of the current steep downtrend resides around the 1.1000 region, and then around the underside of the noted long-term uptrend line.
James Chen, CMT
Chief Technical Strategist
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