Weekly
• Last Candlesticks pattern: Bullish engulfing
• Time of formation: 02 May 2016
• Trend bias: Up
Daily
• Last Candlesticks pattern: Hammer
• Time of formation: 19 Oct 2016
• Trend bias: Up
USD/CAD – 1.3395
Although the greenback jumped to 1.3456 earlier this week, lack of follow through buying and the subsequent retreat suggest further consolidation would be seen and pullback to the Tenkan-Sen (now at 1.3367) is likely, however, reckon downside would be limited to 1.3300-10 and support at 1.3264-77 should remain intact and bring further choppy trading later. A daily close below support at 1.3264-77 would revive bearishness and signal another leg of decline from 1.3535 is underway for weakness to 1.3200, then 1.3160-65 but reckon downside would be limited to 1.3100 and price should stay well above support at 1.3056, bring rebound later. Only a drop below this level would retain bearishness and signal the rebound from 1.2969 has indeed ended, bring further fall to 1.3000 first, however, said support at 1.2969 should remain intact.
On the upside, above said resistance at 1.3456 would extend the rebound from 1.3264 to 1.3500, break there would suggest the pullback from 1.3535 top has ended and bring retest of said resistance at 1.3535 which is likely to hold on first testing. 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.
Recommendation: Stand aside for this week.
On the weekly chart, as the greenback has rebounded after holding above support at 1.3264 and consolidation with mild upside bias is seen for gain to 1.3455-60, above there would suggest the pullback from 1.3535 has ended, bring retest of this level. A break 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, expect pullback to be limited to 1.3310-15 and support at 1.3264-77 should remain intact, bring another rebound later. A weekly close below the Tenkan-Sen (now at 1.3271) would signal top has been formed at 1.3535 and test of previous resistance at 1.3210 would follow, however, break there is needed to add credence to this view, bring further fall to 1.3150-60, break there would signal the rebound from 1.2969 has ended, bring subsequent decline towards 1.3083 but indicated support at 1.3056 should hold from here, risk from there has increased for a rebound later.
