Weekly
• Last Candlesticks pattern: Shooting doji
• Time of formation: 02 May 2016
• Trend bias: Up
Daily
• Last Candlesticks pattern: Bearish engulfing
• Time of formation: 5 May 2017
• Trend bias: Up
USD/CAD – 1.3597
As the greenback has retreated again after faltering below recent high of 1.3794, suggesting further consolidation below this level would be seen, however, still reckon downside would be limited to 1.3540-50 and bring rebound later, above 1.3670 would bring test of 1.3720-25 but break of 1.3770 is needed to signal the pullback from 1.3794 has ended, bring retest of this level. Once this recent high is penetrated, this would confirm resumption of upmove from 1.2461 and extend gain to 1.3835-40 (61.8% Fibonacci retracement of 1.4690-1.2461) and possibly towards 1.3900-10 but overbought condition should prevent sharp move beyond 1.3950 and price should falter below psychological resistance at 1.4000.
On the downside, below 1.3530 support would abort and signal a temporary top has been formed at 1.3794, bring retracement of recent upmove to 1.3470-75, then 1.3440 but reckon previous support at 1.3411 would hold from here and bring rebound later. Looking ahead, only a daily close below this support at 1.3411 would signal recent upmove from 1.2461 has ended instead, bring further fall to the upper Kumo (now at 1.3359) and possibly 1.3300 but reckon the lower Kumo (now at 1.3258) would hold.
Recommendation: Hold long entered at 1.3650 for 1.3850 with stop below 1.3550.
On the weekly chart, although the greenback rose to as high as 1.3794 earlier this month, the subsequent retreat formed a doji pattern with a long upper shadow (shooting star alike) on the weekly chart, suggesting consolidation below this level would be seen and pullback to the upper Kumo (now at 1.3576) cannot be ruled out before prospect of another rise, above 1.3770 would bring retest of 1.3794 but break there is needed to extend recent erratic upmove from 1.2461 (2016 low) to 1.3835-40 (61.8% Fibonacci retracement of 1.4690-1.2461) and then 1.3900 but overbought condition should prevent sharp move beyond psychological resistance at 1.4000, risk from there has increased for a retreat to take place later.
On the downside, below 1.3530 support would defer and suggest a temporary top is possibly formed, bring test of the Tenkan-Sen (now at 1.3509), a weekly close below there would add credence to this view, bring retracement of recent upmove to 1.3450, then test of support at 1.3411 but reckon the Kijun-Sen (now at 1.3382) would limit downside and bring another rise later. In the event the pair drops below the Kijun-Sen, this would suggest top is formed instead, bring weakness to 1.3300, then 1.3260-65 but reckon support at 1.3223 would remain intact.
