Chart USD/CAD Update: Lower in USD- and CAD-driven trade
Consolidation has given way to a break below 1.4200 in both USD- and CAD-driven trade
| Levels | Imp | Comment | Levels | Imp | Comment | |||
|---|---|---|---|---|---|---|---|---|
| R4 | 1.4350 | * | congestion | S1 | 1.4100 | minor congestion | ||
| R3 | 1.4290/00 | ** | 61.8% ret; 9 Oct YTD high | S2 | 1.4085 | ** | 38.2% ret of Aug-Oct rally | |
| R2 | 1.4250 | * | break level | S3 | 1.4015 | ** | 50% ret of Aug-Oct rally | |
| R1 | 1.4200 | ** | congestion | S4 | 1.4000 | ** | congestion |
Asterisk denotes strength of level
16:35 BST - Consolidation has given way to a break below 1.4200 in both USD- and CAD-driven trade, with prices currently balanced around 1.4150. A near-term distribution top beneath critical resistance at the 1.4290 Fibonacci retracement and the 1.4300 current year high of 9 October has been completed, with room for further losses as daily studies remain under pressure. Focus is on support within the 1.4085 Fibonacci retracement and congestion around 1.4100. But flattening oversold daily stochastics and rising weekly charts should limit any initial tests in short-covering/consolidation.
Meanwhile, a close back above congestion resistance at 1.4200 will help to stabilise sentiment and prompt consolidation beneath the 1.4250 break level. A close above 1.4290/00 is needed to turn price action positive and extend broad January gains towards congestion around 1.4350.