Chart USD/CAD Update: Extending cautious trade
The anticipated minor test lower has bounced from congestion support at 1.3900
| Levels | Imp | Comment | Levels | Imp | Comment | |||
|---|---|---|---|---|---|---|---|---|
| R4 | 1.4150 | ** | 50% ret of Mar-May fall | S1 | 1.3900 | * | congestion | |
| R3 | 1.4100 | break level | S2 | 1.3800 | congestion | |||
| R2 | 1.4050 | ** | 38.2% ret of Mar-May fall | S3 | 1.3745 | ** | 76.4% ret of Sep-Feb rally | |
| R1 | 1.4000 | * | break level | S4 | 1.3700 | ** | congestion |
Asterisk denotes strength of level
16:20 BST - The anticipated minor test lower has bounced from congestion support at 1.3900, as oversold intraday studies unwind, with prices currently trading around 1.3975. Focus is back on resistance at 1.4000. But overbought daily stochastics are expected to limit any initial tests in consolidation, before the positive daily Tension Indicator and improving weekly charts prompt a break. A close above here will turn sentiment positive and extend May gains initially towards the 1.4050 Fibonacci retracement, where bearish longer-term charts could promote renewed selling interest. Meanwhile, any immediate tests below 1.3900 should give way to consolidation above 1.3800.