FX.co ★ USD/CAD technical analysis for May 19, 2011

Support levels: 0.9513, 0.9440, 0.9400
Resistance levels: 0.9840, 0.9972, 1.0050

In a 4-hour graph the USD/CAD is demonstrating downside movement. Nevertheless, the growth might be resumed after current rollback.
As mentioned before, in case the resistance near 0.9721 is broken we should expect upside movement to 0.9972. Further break of 1.0380 will denote that the rollback from 1.0680 is completed and further growth should be expected.
It is worth mentioning that in a 4-hour graph a reverse figure “Reversed Head and Shoulders” was formed. Break of the neck line proved this point of view and targeted the pair to 1.0050.
If a reversal takes place and the USD/CAD breaks the 0.9440 support level, further advance to 0.9400 should be expected. Besides, we can expect a decline to 0.9353, which is 100.0 Fibonacci projection of 1.0285 to 0.9666 up to 0.9972.
In the midterm the breakout of the support level at 0.9930 indicated continuing midterm downtrend from 1.3063 (2009 high) with 0.9700 as the first target and 0.9500 as the next possible target. However, this downside movement is probably a correction, and a strong support level is located near 0.9056-0.9700.
The viewpoint at the pair is bearish until the resistance at 0.9972 is broken.
Thus, if a reversal takes place, the breakout of 1.0851 will prove the downtrend broken through from 1.3063. In this case the USD/CAD is expected to go up to 1.1126 with 1.1866 as the next target.