USD/CAD Approaching Key Downtrend Resistance Line

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USD/CAD Approaching Key Downtrend Resistance Line

By James Chen on June 23, 2009 | More Posts By James Chen | Author's Website

After breaking out cleanly above a key support/resistance level in the 1.1450 price region, USD/CAD (a daily chart of which is shown) has ascended further to approach an important downtrend resistance line extending from the fourth test of the 1.3000 region back in early March. This is an important trendline juncture, as it represents the strong overall downtrend that has been in place for the last three months. How price reacts to this line should help dictate future direction for the pair. Any breakout above this trendline should place the current downtrend in serious reversal jeopardy, with an initial further resistance target in the 1.1800 price region. If the trendline is ultimately respected, immediate downside support continues to reside in the noted 1.1450 price region.

(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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