Forex Analysis: USD/CAD Stalls Above Key Confluence of Support

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USD/CAD Daily Chart

USD/CAD (daily chart) has stalled in a congestion right above important support around the 0.9900 price level, which is also just around the 50-day moving average. This confluence has offered consistent support for the tight consolidation of the past week. The consolidation occurs after price displayed a clear price-oscillator bearish divergence through the first half of November, before breaking down below a key uptrend support line extending back to the September 0.9630 low. Currently still in consolidation just above the 0.9900 support confluence, any breakdown below this area could have the downside follow-through to re-test near-term potential support around the 0.9800 price region, with longer-term potential support around the 0.9630 price region. To the upside, if the current support confluence is respected, potential resistance resides just above parity around the important 1.0050 price region.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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About Author

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.

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