USD/CAD Still Trying To Base

The FX Trader’s view - After the 2009 decline clear support has been emerging from above the 1.0200 level. The signs are promising for the bulls, but they still require an extra effort before a base can be said to be complete.

• WEEKLY CHART: The 2009 downmove stopped short of the 76.4% level at 1.0000. Support, in fact, was found close to the 1.0296 Sep-08 low, the take-off point for the last major upleg.
• DAILY CHART: A drift back in price saw support emerge in Jan from around the 1.0204 Oct-09 low, keeping that long term 1.0000 76.4% level on the Weekly chart out of reach). Subsequent recovery has now seen a break of the s/term falling resistance line, but key is the higher resistance around the 1.0880 23.6% level – recovery through this would also mean violation of the bear channel top projection (near 1.0800 currently). -It would be a clear bull sign, completing a nice base in the process. We would then be in a position to look at higher targets, the first obvious one being the 38.2% recovery towards 1.1300.

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