Price action on USD/CAD, a daily chart of which is shown, has been fluctuating around major support in the key 1.0800 price region for the last couple of days. Without actually having made a true breakdown (or daily close) below this support region as of yet (7/28/2009 morning), price has tentatively dipped significantly below it. With a true breakdown potentially in the making, a major downside support target resides in the 1.0550 support/resistance price region. In the event of a support breakdown of this nature, a downtrend continuation off the key 38.2% upside retracement (the high-to-low retracement span being measured from the high on 3/9/2009 to the low on 6/1/2009) will have been confirmed.
- James Chen, CTA, CMT
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