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| USD/CAD Drops to Uptrend Support Line Posted: 09 Jun 2011 12:06 PM PDT  (Please click on the chart to enlarge. Chart key: price on 1st pane, Stochastics on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average in orange; 100-period simple moving average in brown; 200-period simple moving average in dark blue; Fibonacci levels in magenta.) 6/09/2011 – USD/CAD (a daily chart of which is shown) as of Thursday (6/09/2011) has once again reached down to touch a steep uptrend support line extending back to the early May 0.9445 low. This uptrend represents a prolonged bullish correction within an overall bearish trend. The current trend line touch occurs after price action respected a confluence of resistance late last week that included both a downtrend resistance line extending back to the October 2010 high, as well as the key 0.9850 area support/resistance region. Now that price has once again reached down to the steep uptrend support line, the pair is at a critical juncture. In the event of a breakdown below the line, thereby continuing the longer-term entrenched downtrend, price action should begin targeting the 0.9600 region, which represents the 61.8% Fibonacci retracement of the noted bullish correction.
James Chen, CTA, CMT
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| Posted: 09 Jun 2011 08:54 AM PDT  (Please click on the chart to enlarge. Chart key: price on 1st pane, Stochastics on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average in orange; 100-period simple moving average in brown; 200-period simple moving average in dark blue; Fibonacci levels in magenta and purple.) 6/09/2011 – EUR/USD (a daily chart of which is shown) as of Thursday (6/0 9/2011) has tentatively broken down below a confluence of two support factors — a key psychological support/resistance level at 1.4500 and a steep uptrend support line extending back to the late-May lows around 1.4000. After making the tentative breakdown, price action pulled back up slightly above the 1.4500 level once again. Despite this pull back, the significant bearishness of the last two days indicates a failure of EUR/USD bulls to break above 1.4700, and could be the precursor to a breakdown of the steep uptrend that has been in place for the last two weeks. With further downside momentum on the tentative breakdown, price action could potentially target further downside support around the 1.4250 price region, which represents both a prior support/resistance level as well as the 61.8% Fibonacci retracement of the noted two-week bullish trend. Further to the downside resides a key bearish target around the important 1.4000 psychological level.
James Chen, CTA, CMT
This posting includes an audio/video/photo media file: Download Now |
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