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 – 1.2555
Although the greenback has recovered after falling to 1.2414 and consolidation above this level would be seen, reckon upside would be limited to the Kijun-Sen (now at 1.2729) and resistance at 1.2771 should hold, bring another decline later, below said support at 1.2414 would extend recent selloff to 1.2400, then 1.2350-60, however, oversold condition should limit downside to 1.2300 and price should stay well above 1.2240-50, risk from there has increased for a rebound to take place later.
On the upside, whilst initial recovery to 1.2620-25, then the Kijun-Sen (now at 1.2729) cannot be ruled out, reckon resistance at 1.2771 would limit upside and bring another decline later. Above previous support at 1.2859 (now resistance) would defer and suggest a temporary low is formed instead, bring a stronger rebound to 1.2900-05, however, still reckon upside would be limited to 1.2940-45 and price should falter below resistance at 1.3015.
Recommendation: Sell at 1.2700 for 1.2400 with stop above 1.2800.
On the weekly chart, as the greenback found support at 1.2414 and has recovered, a white candlestick looks set to be formed this week, hence consolidation with mild upside bias is seen for retracement of recent decline to 1.2700-05, however, reckon upside would be limited to 1.2770-75 and price should falter below 1.2800-05 and bring another decline later. Below 1.2414 would signal medium term fall from 1.4690 top has resumed and extend weakness to 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), risk from there has increased for a rebound later.
On the upside, although initial recovery to 1.2700-05 cannot be ruled out, reckon upside would be limited to 1.2771 resistance and bring another decline later. Above previous support at 1.2589 (now resistance) would suggest a temporary low is possibly formed, bring a stronger rebound to 1.2900, then towards resistance at 1.2944, however, reckon the Tenkan-Sen (now at 1.2978) would hold. Only a weekly close above the Tenkan-Sen (now at 1.2978) would shift risk to upside for a strong rebound to to 1.3015 resistance, then 1.3050-60 but price should falter below the Kijun-Sen (now at 1.3104) and bring another selloff in late Q3.
