(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; downtrend line in red; horizontal support/resistance level in yellow; 200-period simple moving average in light blue.)
6/18/2008 – USD/CAD – Consolidating price action on the USD/CAD daily chart, as shown, has hit and bounced down off significant resistance within the past week. This resistance is comprised of both the horizontal support/resistance level (represented on the chart in yellow) and the uptrend line (in green) that was broken down back in early May. After that breakdown, the move back up to the line represented a classic pullback move. Of course, a true pullback and continuation would not be confirmed unless price ultimately moves lower than the lowest low after breakout (around 0.9800). Oscillators like the displayed Stochastics are lending strength to this bearish outlook, as they are clearly emerging down from overbought territory. In the event of this move back down, however, price is currently very close to a significant support level found at the red downtrend line, whose resistance was broken out of in early June. So essentially, price is wavering within a tight corridor between strong resistance and support, with a slightly bearish bias. Further support to the downside, below the red downtrend line, resides in the region of the aforementioned last low, around 0.9800-0.9820.
Chief Technical Analyst
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