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Price action on USD/CAD, a daily chart of which is shown, has been fluctuating around major support in the key 1.0800 price region for the last couple of days. Without actually having made a true breakdown (or daily close) below this support region as of yet (7/28/2009 morning), price has tentatively dipped significantly below it. With a true breakdown potentially in the making, a major downside support target resides in the 1.0550 support/resistance price region. In the event of a support breakdown of this nature, a downtrend continuation off the key 38.2% upside retracement (the high-to-low retracement span being measured from the high on 3/9/2009 to the low on 6/1/2009) will have been confirmed.
- James Chen, CTA, CMT
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“With a true breakdown potentially in the making, a major downside support target resides in the 1.0550 support/resistance price region”
Are you still bearish?
Hi Pedro,
Thanks for visiting, and sorry for the late reply! Yes, right now price is once again consolidating around strong support in the 1.0800 price region, but I am still bearish on this pair at this time. Thanks, Pedro!
- James Chen
thanks james….ok so we should see 1.0550 by when now?
Hi Pedro,
Thanks again for visiting. Clearly, price fell short of the support target before turning back up. 1.0550 continues to be a valid downside support target. But to address your question of when we will see it, no one can really know. It will become clearer if price moves back down significantly below 1.0800. Thanks, Pedro!
- James Chen