Will USD/CAD Bounce Off 76.4% Support Continue?

The FX Specialist view - An initial recovery off long term 76.4% support in USD/CAD has been followed by a deep setback, which has just found support from a shorter term 76.4% level. Bulls waiting in the wings now need this to continue, breaching certain resistance points.

• WEEKLY CHART: Earlier this year good support emerged from the long term 1.0000 76.4% retracement, which coincided with the centre of congestion from 2008. First resistance comes from around the 23.6% bounce level – so far the market has failed to sustain above this.
• DAILY CHART: The earlier recovery failed to hold above the 23.6% level, postponing a bull trigger and subsequent move towards the higher 1.1125 38.2% area. The subsequent slip back has now tested the 76.4% level, prompting a smart rebound. However, sidelined bulls need to see continuation higher, with better close above that 23.6% level and break of the 25-May 1.0851 high. A drop back through 76.4% and the 1.0105 13-May low would not be a good sign now.

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