Chart Of The Day: USD/CAD

8/27/2008 - USD/CAD - Long-term price action on USD/CAD (a daily chart of which is shown) has come down decisively off the significant downtrend line (in red) that has served as resistance for at least 5 years. After retreating from this resistance line last week, price has gradually descended from the swing high. Going forward, the red downtrend line should continue to act as resistance to the upside, while the yellow horizontal support/resistance line around the 1.0300 region should serve as immediate support to the downside. Further down, additional key support resides around the green intra-channel uptrend line. A strong breakdown of this uptrend line, incidentally, would constitute a very bearish signal that would hint at a potential prolonged drop, continuing the long-term downtrend in the pair.

James Chen
Chief Technical Analyst

FX Solutions

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(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance lines in yellow; 200-period simple moving average in light blue.)