USD/CAD Bullish Correction Within Downtrend

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USD/CAD Bullish Correction Within Downtrend

By James Chen on May 14, 2009 | More Posts By James Chen | Author's Website

Price action on USD/CAD, a daily chart of which is shown, has made a minor bullish correction within the context of a steep overall downtrend channel. This correction follows weeks of steeply bearish price action. As of Thursday (5/14/2009) morning, the pair has ascended to approach strong resistance at the key 1.1800 level before retreating. There is still potentially more room to the upside for the current correction. A breakout above 1.1800 would be a significant event that should target further resistance in the important 1.2000 price region. Downside support continues to reside in the 1.1450 price region, which represents the lowest low within the current downtrend channel.

(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.)

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