Weekly
• Last Candlesticks pattern: Shooting doji
• Time of formation: 01 May 2017
• Trend bias: Sideways
Daily
• Last Candlesticks pattern: Long white candlestick
• Time of formation: 20 Oct 2017
• Trend bias: Near term up
USD/CAD – 1.2814
The greenback has maintained a firm undertone after surging to 1.2917 late last week, adding credence to our bullish view that the rise from 1.2061 low is still in progress and may extend further gain to 1.2925-30 (50% Fibonacci retracement of 1.3794-1.2061) and then 1.3000, however, loss of near term upward momentum should prevent sharp move beyond 1.3100 and reckon dynamic resistance at 1.3130-35 (61.8% Fibonacci retracement) would hold from here, risk from there has increased for a retreat later.
On the downside, whilst pullback to the Tenkan-Sen (now at 1.2769) and then 1.2700 cannot be ruled out, reckon downside would be limited to the Kijun-Sen (now at 1.2667) and bring another rise later. Only a daily close below the Kijun-Sen would defer and suggest top is possibly formed, bring weakness to previous resistance at 1.2599 (now support) but a daily close below there is needed to confirm, bring correction to 1.2550, then towards 1.2500-10, having said that, price should stay well above support at 1.2433.
Recommendation: Buy at 1.2700 for 1.2950 with stop below 1.2600
On the weekly chart, as the greenback has eased after faltering below last week’s high at 1.2917, suggesting minor consolidation below this level would be seen and pullback to 1.2700 cannot be ruled out, however, reckon support at 1.2612 would limit downside and bring another rise later to 1.2925-30 (50% Fibonacci retracement of 1.3794-1.2061 and current level of the Kijun-Sen), break there would extend the rise from 1.2061 low to 1.3000 and then 1.3100 but still reckon upside would be limited to 1.3150-60 and the lower Kumo (now at 1.3224) should remain intact.
On the downside, although initial pullback to 1.2700 is likely, reckon downside would be limited to 1.2650-60 and last week’s low at 1.2612 should hold, bring another rise later. A drop below previous resistance at 1.2599 (now support) would defer and suggest top is possibly formed, bring weakness to 1.2550, then towards 1.2500 but reckon the Tenkan-Sen (now at 1.2489) would limit downside and bring another rise later. Only a drop below support at 1.2433 would signal the rebound from 1.2061 has ended instead, bring further fall to 1.2390-00 and later towards 1.2300-10 but reckon 1.2121 support would remain intact.
