Forex Trading Technical Analysis (2010/07/28) USD/CAD in Large Triangle Consolidation
(Please click on the forex chart thumbnail to enlarge)
7/28/2010 Forex Trading Technical Analysis (FXpath.com) – USD/CAD (a daily chart of which is shown), which has generally been entrenched in an overall sideways consolidation since late 2009, has now formed a large converging triangle pattern consolidation. This pattern suggests a progressive tightening of volatility in the pair over the course of the past several months, which could potentially result in a substantial breakout on high volatility. As there is little in the way of a strongly discernible trend on USD/CAD at the moment, the direction of this potential breakout does not currently have a clear bias. Currently, as of Wednesday (7/28/2010), price is near the lower portion of the triangle, just under the 1.0400 support/resistance level. A break to the downside below this triangle should meet immediate downside support in the 1.0200 price region, followed by 1.0100 on further bearish momentum. Conversely, a breakout to the upside above the upper border of the triangle could initially target further upside resistance in the 1.0675 price region.
(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
James Chen, CTA, CMT (bio)
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