- Last Candlesticks pattern: Bullish engulfing
- Time of formation: 02 May 2016
- Trend bias: Up
- Last Candlesticks pattern: Hammer
- Time of formation: 19 Oct 2016
- Trend bias: Up
USD/CAD – 1.3333
Although the greenback has retreated quite sharply this week and further consolidation below recent high of 1.3599 would be seen and initial downside risk remains for test of the Kijun-Sen (now at 1.3272), reckon downside would be limited to 1.3250 and bring another rebound later, above the Tenkan-Sen (now at 1.3406) would bring rebound to 1.3495-00 but break there is needed to signal the retreat from 1.3535 has ended, bring retest of this level. looking ahead, only a break of this level would retain bullishness and extend early erratic upmove from 1.2461 low to 1.3599, then 1.3660-70 but still reckon upside would be limited to 1.3700 and risk from there is seen for a retreat later.
On the downside, whilst initial fall to 1.3270-75 cannot be ruled out, reckon 1.23240-50 would limit downside and bring another rebound later. Only below previous resistance at 1.3210 would abort and signal top has indeed been formed at 1.3535, bring further fall to 1.3160-65 and possibly towards 1.3100 but price should stay well above support at 1.3056, bring rebound later. Only a daily close below this level would revive bearishness and signal the rebound from 1.2969 has indeed ended, bring further fall to 1.3000 first but said support at 1.2969 should remain intact.
Recommendation: Buy at 1.3250 for 1.3450 with stop below 1.3150.
On the weekly chart, despite last week’s rise to 1.3535, this week’s retreat looks set to form a black candlestick and consolidation below resistance at 1.3535 would be seen and pullback to the Kijun-Sen (now at 1.3284) cannot be ruled out, however, reckon the Tenkan-Sen (now at 1.3252) would limit downside and bring another rebound, above 1.3400 would bring rebound to this week’s high at 1.3495 but a weekly close above there is needed to signal retreat from 1.3535 has ended, bring retest of 1.3535, above there would extend recent rise from 1.2969 to indicated resistance at 1.3599, however, a break of this resistance is needed to retain bullishness and signal upmove from 1.2461 (2016 low) has resumed for headway to 1.3700 and later towards 1.3835-40 (61.8% Fibonacci retracement of 1.4690-1.2461) which is likely to cap upside.
On the downside, although pullback to 1.3280-85 cannot be ruled out, reckon downside would be limited to the Tenkan-Sen (now at 1.3252)and bring another rise later. A drop below previous resistance at 1.3210 would suggest a temporary top is formed instead, risk weakness to 1.3150-60, break there would add credence to this view and signal the rebound from 1.2969 has ended, bring further fall to towards 1.3083, however, indicated support at 1.3056 support should hold.