By Mohammed Isah of fxtechstrategy.com
: The dollar/Canadian dollar continued to lose ground Monday after closing at 1.0502 Friday.
to view a chart of the pair.
With the pair's recovery from its 2010 low at 1.0219 now halted, the risk of further downside pressure is now seen toward its Jan. 12 high at 1.0411.
A decisive violation of that level will set the stage for a push lower toward the 1.0219/1.0204 zone.
A break through that zone will open the door for the resumption of the pair's declines from the 1.3060 level toward its psychological level at 1.0100, and then the big psychological/parity level at 1.0000. This would nullify the pair's bottom-forming process now in place.
Daily stochastics are bearish and pointing lower.
On the other hand, the pair will have to firmly break and close above the 1.0779 level, its 2010 high, to halt its current downside weakness and trigger a further corrective recovery toward its Dec. 1 high at 1.0867.
That should validate its double-bottom pattern and create the possibility of further strength toward the 1.0991 level, the Sept. 27 high, and then 1.1123, the Aug. 17 high.
On the whole, downside risk is now seen toward 1.0411 on the back of the recent strong selloff from 1.0779.
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Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.