Weekly
• Last Candlesticks pattern: Shooting doji
• Time of formation: 01 May 2017
• Trend bias: Sideways
Daily
• Last Candlesticks pattern: Bearish engulfing
• Time of formation: 5 May 2017
• Trend bias: Down
USD/CAD – 1.2590
As the greenback has continued heading south after recent selloff 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 1.2550, then 1.2500 would be seen, however, oversold condition should limit downside to previous support at 1.2461 and price should stay well above 1.2400, risk from there has increased for a rebound to take place later.
On the upside, whilst initial recovery to 1.2700, then test of the Tenkan-Sen (now at 1.2761) cannot be ruled out, reckon 1.2830-40 would limit upside and bring another decline later. Only above the Kijun-Sen (now at 1.2963) would abort and suggest a temporary low is formed instead, risk a stronger rebound to resistance at 1.3015, however, still reckon upside would be limited to 1.3050 and price should falter well below previous support at 1.3165, bring another selloff later in late Q3.
Recommendation: Sell at 1.2830 for 1.2530 with stop above 1.2930.
On the weekly chart, as recent selloff has gathered momentum, adding credence to our view that the recovery from 1.2461 (2016 low) has ended at 1.3794 early last month, hence bearishness remains for further weakness to 1.2500-10, then test of said support at 1.2461, however, break there is needed to confirm early decline from 1.4690 top has resumed and extend further fall to 1.2400, then towards 1.2300-10 but near term oversold condition should prevent sharp fall below 1.2240-50 and price should stay above 1.2175 (61.8% Fibonacci retracement of 1.0621-1.4690).
On the upside, although initial recovery to 1.2700-05 cannot be ruled out, reckon upside would be limited to 1.2800 and 1.2850-60 should hold, bring another decline later. Above 1.2940-45 would defer and risk a stronger rebound to 1.3015 resistance but price should falter below the Tenkan-Sen (now at 1.3063) and bring another selloff later to aforesaid downside targets.
