(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.)
8/20/2009 € USD/CAD € Price action on USD/CAD, a daily chart of which is shown, has formed another short-term uptrend correction within the context of a strong longer-term downtrend. This bullish correction has occurred after price hit a 10-month low at 1.0630 in the beginning of this month. Currently very close to the short-term uptrend support line, price could either continue the bullish correction with a bounce up off the trendline, or it could seek to continue the overall downtrend by breaking down below the trendline. In the case of a breakdown, the 1.0800 price region remains as a strong further support target to the downside. An overall downtrend continuation, however, would only be confirmed on a clear breakdown below the noted 1.0630 low. In the case of a bounce and potential continuation of the current bullish correction, the 1.1120 price region is a key resistance level to the upside.
James Chen, CMT
Chief Technical Strategist
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