• Last Candlesticks pattern: Shooting doji
• Time of formation: 01 May 2017
• Trend bias: Sideway
• Last Candlesticks pattern: Bearish engulfing
• Time of formation: 5 May 2017
• Trend bias: Down
USD/CAD – 1.2945
As the greenback has remained under pressure after recent selloff and price has broken below indicated previous support at 1.2969, adding credence to our bearish view that early erratic rise from 1.2461 has ended at 1.3794 earlier, hence further fall to 1.2900 and later 1.2850 would be seen, however, reckon support at 1.2822 would hold from here due to oversold condition and price should stay well above support at 1.2763, risk from there has increased for a rebound to take place later this month.
On the upside, whilst initial recovery to 1.3000-05 and possibly towards 1.3050 cannot be ruled out, reckon upside would be limited to the Tenkan-Sen (now at 1.3092) and bring another selloff later. Only a sustained breach above previous support 1.3165 (now resistance) would defer and bring a stronger rebound to 1.3180-85 and then test of previous support at 1.3208 but upside should be limited to the Kijun-Sen (now at 1.3230) and price should falter below 1.3305-10, bring another decline later.
Recommendation: Sell again at 1.3050 for 1.2850 with stop above 1.3150.
On the weekly chart, last week’s selloff below indicated previous support at 1.2969 did form another long black candlestick and bearishness remains fort the fall from 1.3794 top to extend weakness to 1.2900, break there would signal the entire recovery from 1.2461 low (2016 low) has ended at 1.3794 early last month, then further decline to 1.2850 and then test of support at 1.2822 would be seen, however, near term oversold condition should limit downside and price should stay above another previous support at 1.2763, bring rebound later.
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.