Chart USD/CAD Update: Limited CAD-driven gains
Cautious trade is giving way to a CAD-driven bounce
| Levels | Imp | Comment | Levels | Imp | Comment | |||
|---|---|---|---|---|---|---|---|---|
| R4 | 1.4200 | ** | congestion | S1 | 1.4050 | break level | ||
| R3 | 1.4150 | * | congestion base | S2 | 1.4000 | ** | break level | |
| R2 | 1.4130 | * | 28 Jul (w) high | S3 | 1.3980 | ** | 38.2% ret of May-Jun rally | |
| R1 | 1.4100 | * | congestion | S4 | 1.3930 | intraday lows |
Asterisk denotes strength of level
16:45 BST - Cautious trade is giving way to a CAD-driven bounce, with the break above 1.4050 turning sentiment neutral. Oversold daily stochastics are unwinding, suggesting room for a test of congestion resistance at 1.4100. But the flat daily Tension Indicator and deteriorating weekly charts should limit any further gains in renewed selling interest beneath the 1.4130 weekly high of 28 July. Following cautious/corrective trade, fresh losses are looked for. Immediate support is ast 1.4050. But a close below stronger support at the 1.3980 Fibonacci retracement and the 1.4000 break level will add weight to sentiment and extend late-June losses towards 1.3900.