Daily Technical Update
January 14, 2010 (USD/CAD) Bearish Continuation Signal



* Daily and 4H: The USD/CAD was held bearish after short-term downsloping trendline held as the resistance at the 1.0400 level.
* In the Daily, you can see that the market is near oversold area, but is crossing towards it (a sign of bearish continuation). But, the candlestick action is not showing signs that it will break 1.0200 intermediate support.
* In the 4H time-frame, We can see a pause at the 1.0300 area in the Wednesday Asian/European session. The market started another attempt to decline in the US session. If the market can close below 1.0300, it may be a bearish continuation signal in this time-frame as well.
* A swing projection in 4H chart, also brings the market to 1.0200 (127% expanded retracement). This would complete a bullish butterfly. As this is also intermediate support, expect a rally here, but the important thing is weather it can break the downsloping trendline.
* A break above this trendline may suggest a rally towards 1.0550 (intermediate-term downsloping trendline in Daily), if that breaks, the 1.0750-1.080 area is the short/intermediate-term range resistance.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. CMS will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

Foreign currency trading is not conducted on an exchange. CMS is acting as a counterparty to its clients’ transactions and as a result, CMS’ interests may be in conflict with its clients. Since CMS acts as the buyer or seller in the transaction one should carefully evaluate any trade recommendation provided by CMS or any of its solicitors. Foreign currency trading involves a substantial risk of loss and may not be suitable for all investors.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.