Chart USD/CAD Update: Choppy trade - studies under pressure
The anticipated break above congestion resistance at 1.4000 has proven shallow
| Levels | Imp | Comment | Levels | Imp | Comment | |||
|---|---|---|---|---|---|---|---|---|
| R4 | 1.4135 | * | break level | S1 | 1.3950 | ** | 61.8% ret of Aug-Oct rally | |
| R3 | 1.4100 | minor congestion | S2 | 1.3900 | * | congestion | ||
| R2 | 1.4050 | break level | S3 | 1.3870 | ** | 76.4% ret of Aug-Oct rally | ||
| R1 | 1.4000 | ** | congestion | S4 | 1.3800 | * | congestion |
Asterisk denotes strength of level
16:25 GMT - The anticipated break above congestion resistance at 1.4000 has proven shallow, with prices falling from 1.4015 to reach 1.3930, before settling into consolidation above support at the 1.3950 Fibonacci retracement. Oversold daily stochastics are edging higher and the bearish daily Tension Indicator is flattening, suggesting room for a fresh test higher. But negative weekly charts should limit scope in renewed selling interest towards 1.4000. A close above here, if seen, will help to stabilise price action and prompt consolidation beneath 1.4050.
Following cautious/corrective trade, fresh losses are looked for. A close below 1.3950 will add weight to sentiment and extend October losses towards congestion around 1.3900.