• Last Candlesticks pattern: Shooting doji
• Time of formation: 02 May 2016
• Trend bias: Up
• Last Candlesticks pattern: Bearish engulfing
• Time of formation: 5 May 2017
• Trend bias: Up
USD/CAD – 1.2992
The greenback has tumbled after meeting renewed selling interest at 1.3348 and decline has accelerated after breaking below previous support at 1.3165 (now resistance), signaling the decline from 1.3794 top is still in progress and downside bias remains for this move to extend further weakness to previous support at 1.2969, however, a sustained breach below this level is needed to retain bearishness and signal early erratic rise from 1.2461 has ended there, bring further fall to 1.2900-10 and later towards 1.2850 but reckon support at 1.2822 would hold and price should stay well above support at 1.2763.
On the upside, whilst initial recovery to 1.3050-55 and possibly towards 1.3100 cannot be ruled out, reckon upside would be limited and price should falter below previous support 1.3165 (now resistance), bring another decline later. A daily close above this level would defer and bring a stronger rebound to 1.3180-85 and then test of previous support at 1.3208 but price should falter below the Kijun-Sen (now at 1.3267) and bring another decline later.
Recommendation: Sell again at 1.3100 for 1.2850 with stop above 1.3200.
On the weekly chart, this week’s selloff after breaking below support at 1.3165 looks set to form another long black candlestick and bearishness remains fort the fall from 1.3794 top to extend weakness to previous support at 1.2969, however, a sustained breach below this level is needed to retain bearishness and signal the entire recovery from 1.2461 low (2016 low) has ended at 1.3794, then further fall to 1.2900 and then 1.2850 would follow but support at 1.2822 should limit downside and price should stay above another previous support at 1.2763 due to near term oversold condition.
On the upside, although initial recovery to 1.3070-80 cannot be ruled out, reckon 1.3100-10 would limit upside and bring another decline later. A weekly close above said previous support at 1.3165 would defer and risk a stronger recovery to 1.3200-10 but still reckon 1.3270-75 would limit upside and price should falter below resistance at 1.3348 and bring another selloff next month.