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During the Asian session on Wednesday, the USDCAD pair rebounded after two days of losses, reaching around 1.3590. This uptick is fueled by a stronger US dollar and lower crude oil prices, which put pressure on the Canadian dollar. The decline in Western Texas Intermediate (WTI) oil prices to approximately $80.70 is attributed to a surplus in API Weekly Crude Oil Stock, indicating an oversupply. Bank of Canada (BoC) Senior Deputy Governor Carolyn Rogers raised concerns about Canada's low productivity and highlighted inflation concerns. Meanwhile, the US Dollar Index (DXY) rose amid a risk-off sentiment ahead of the US Personal Consumption Expenditures (PCE) release, but declining US Treasury yields suggest market expectations of potential rate cuts by the US Federal Reserve.

CADJPY - H1 Timeframe

The breakout of price from the wedge pattern on the 1-hour timeframe of CADJPY can be seen to have created a break in the market structure. It is my expectation to see price complete a proper retest of the supply zone responsible for the break of structure. In line with this, the 88% of the Fibonacci retracement, bearish array of the moving averages, and the moving average resistance are my confluence for the bearish sentiment.

Analyst’s Expectations:

• Direction: Bearish
• Target: 111.232
• Invalidation: 111.712

NZDCAD - H1 Timeframe

NZDCAD is currently consolidating below the trendline resistance, which indicates the likelihood of a breakout soon. Following this, I expect to see a breakout above the trendline resistance before settling for a long position on NZDCAD, in the meantime however, my fingers are crossed.

Analyst’s Expectations:

• Direction: Bullish
• Target: 0.82049
• Invalidation: 0.81457

EURCAD - H4 Timeframe

EURCAD is currently approaching a trendline support; implying the likelihood of a bullish rejection from the support line. There is also the presence of a Fibonacci retracement level, 200-period moving average support, and the demand zone as further confluences for the bullish sentiment.

Analyst’s Expectations:

• Direction: Bullish
• Target: 1.47460
• Invalidation: 1.46604

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

Bearish Scenario: Sales below 5220 with TP1: 5210 and TP2: 5192.21 with S.L. above 5248 or at least 1% of account capital*.

Bullish Scenario: Buys above 5225 (if price fails to break below decisively) with TP1: 5235, TP2: 5242, TP3: 5248, TP4: 5255, TP5: 5290, and TP6 (Swing): 5300 with S.L. below 5210 or at least 1% of account capital*. Apply trailing stop

Scenario from H4 chart:

US500 continues within a macro bullish trend and has been undergoing a corrective phase since late last week, which has covered 50% of the volume inefficiency (gap) from Wednesday after the Fed meeting.

This correction is leaving the level 5248.06 as the last relevant resistance, implying that until this level is broken with two confirming bullish moves. The price respects the last selling zone around 5233, the current correction could extend towards the flip level (resistance turned support) at 5192.21 and the buying zone around 5180 - 5185, very close to the last intraday support at 5176.46.

This decline towards the nearest buying zone from last week will activate the bulls to trigger a new price rally towards the selling zones left by the decline until they are broken to extend purchases.

On the other hand, the decisive breakout of Tuesday's buying zone at 5233 will test the weekly opening (W1:O) and the last relevant resistance at 5248.06, whose decisive breakout with a candle body or two confirming moves will renew the bullish trend-seeking to surpass last week's resistance and current all-time high at 5266.56 with a target in the coming days or weeks to reach 5300. RSI above 50 confirms the corrective scenario and bull dominance.

*Uncovered POC: POC = Point of Control: It is the level or zone where the highest volume concentration occurred. If there was a bearish movement from it previously, it is considered a selling zone and forms a resistance zone. On the contrary, if there was a bullish impulse previously, it is considered a buying zone, usually located at lows, thus forming support zones.

**Consider this risk management suggestion

**It is important that risk management be based on capital and traded volume. For this, a maximum risk of 1% of capital is recommended. It is suggested to use risk management indicators like the Easy Order.

The reversal of the Bank of Japan’s monetary policy tightening at the beginning of March not only failed to reverse, but also added to the Yen’s weakening trend. The systematic pressure on the Japanese currency raises even more questions, given that the Fed and ECB are less than three months away from widely expected rate cuts.

The USDJPY rose to 151.97 on Wednesday morning, seven pips above the November 2022 high and four pips above the October 2022 high, when intervention reversed the rate sharply. Wednesday’s high was the highest since 1990.

The 152 level looks like a tried and tested intervention zone to prevent the Yen from weakening. In recent days, we have heard repeated statements from government and central bank officials that there is no fundamental reason for the Yen to weaken. Such signs sound like the threat of intervention, which is dangerous for short-term speculators.

Moreover, this is the third time in two years that the Yen has approached this level. On the previous two occasions, we saw a strong and sustained reversal, and the market is close to forming a reflex against this level.

However, the bulls also have a strong argument on their side.

Corrections are becoming increasingly shallow. USDJPY lost 16% in three months after approaching 152 in 2022. In 2023, however, the decline was around 7.5%. At the end of February, the pair rose gently towards 151 and turned sharply lower but rallied again after a 3.5% decline.

The initial USDJPY spike in 2022 made an impressive contribution to inflation, as, at its peak, the pair was over 33% higher than a year earlier. Long-term yen volatility is falling, and inflation is on track to stabilise around the target of 2%. Therefore, it makes no sense for the Ministry of Finance and the Bank of Japan to continue making 152 a red line. We are likely to see more rhetoric and possibly more policy rate hikes in the coming months, but not as dramatic FX interventions as in 2022 or late 2023.

• USDJPY reversed from multi-year resistance level 151.357
• Likely to fall to support level 146.90

USDJPY currency pair recently reversed up from the powerful multi-year resistance level 151.357 (former monthly high from 2022), standing close to the upper weekly Bollinger Band.

The downward reversal from the resistance level 151.357 stopped the previous minor corrective wave 2 of the weekly downward impulse sequence (C) from last year.

Given the still overbought weekly Stochastic, USDJPY currency pair can be expected to fall further to the next support level 146.90 (low of the previous weekly correction).

• GBPAUD reversed from support level 1.9245
• Likely to rise to resistance level 1.9500

GBPAUD currency pair recently reversed up from the support level 1.9245 (lower border of the narrow sideways price range from January), intersecting with lower daily Bollinger Band.

The upward reversal from the support level 1.9245 started the active minor impulse wave 3, which belongs to wave (3) from February.

Given the rising bullish sterling sentiment, GBPAUD currency pair can be expected to rise further to the next resistance level 1.9500 (upper border of the active sideways price range).

• German 40 index hits all-time high
• Uptrend shows ongoing strength, but a pause is likely

The German 40 index has been having an exceptional performance so far in 2024, gaining more than 10% to unlock an all-time high of 18,510 on Wednesday.

The ongoing positive trend has yet to show any cracks, but with the price marking its 10th consecutive green week near the upper Bollinger band and the momentum indicators pointing to overbought conditions, the bears could be around the corner.

If the rally continues, resistance could pop up within the 18,953-19,000 territory, where the ascending trendline which connects February’s and March’s highs is placed. Additional gains from there could touch the resistance trendline from August 2022.

Should downside pressures resurface, the 18,000 round mark and the 20-day simple moving average (SMA) could attempt to stop the bears ahead of the support trendline at 17,740. A correction lower could halt immediately within the 17,470-17,335 constraining area, where the 50-day SMA is placed. Yet, only a drop below the 17,000 number would neutralize the medium-term outlook.

The ascent in the German 40 index seems stable overall, but there is a possibility of profit-taking following the recent record highs.

The USDCHF continues to trend higher within the broader bull-channel and hit new multi-week high (the highest since Nov 2) on Wednesday.

Larger bulls accelerated after surprise rate cut by SNB last week, which increased pressure on Swiss franc and continues to weigh, with sustained break above psychological 0.90 barrier, adding to pair’s bullish stance.

Recently formed double golden cross (10/200 and 20/200DMA) and very strong bullish momentum, underpin the action, though daily studies are overstretched and warn that bulls may pause for consolidation / shallow correction in coming sessions.

Broken Fibo resistance (0.9028) and psychological (0.9000) reverted to supports, guarding daily Tenkan-sen (0.8945) which should contain dips to keep bullish structure intact for attack at next target at 0.9112 (Nov 1 high).

Res: 0.9071; 0.9112; 0.9181; 0.9244.
Sup: 0.9028; 0.9000; 0.8945; 0.8895.

Daily Pivots: (S1) 1.0816; (P) 1.0840; (R1) 1.0856; More...

Outlook in EUR/USD remains unchanged as consolidations continue above 1.0801. Intraday bias remains neutral and But risk will stay on the downside as long as 55 4H EMA (now at 1.0855) holds. Below 1.0801 will resume the fall from 1.0980 to retest 1.0694 first. Break there will resume the decline from 1.1138 and target 100% projection of 1.1138 to 1.0694 from 1.0980 at 1.0536.

In the bigger picture, price actions from 1.1274 are viewed as a corrective pattern to rise from 0.9534 (2022 low). Rise from 1.0447 is seen as the second leg. While further rally could cannot be ruled out, upside should be limited by 1.1274 to bring the third leg of the pattern. Meanwhile, sustained break of 1.0694 support will argue that the third leg has already started for 1.0447 and possibly below.

Daily Pivots: (S1) 1.2611; (P) 1.2639; (R1) 1.2657; More...

No change in GBP/USD's outlook as consolidation continues above 1.2574. Intraday bias stays neutral and risk remains on the downside as long as 55 4H EMA (now at 1.2675) holds. Below 1.2574 will resume the fall from 1.2892 to 1.2517 structural support first. Decisive break there will suggest that rise from 1.2036 has completed at 1.2892 already, and turn near term outlook bearish.

In the bigger picture, price actions from 1.3141 medium term top are seen as a corrective pattern to up trend from 1.0351 (2022 low). Rise from 1.2036 is seen as the second leg, which might still be in progress. But upside should be limited by 1.3141 to bring the third leg of the pattern. Meanwhile, break of 1.2517 support will argue that the third leg has already started for 38.2% retracement of 1.0351 (2022 low) to 1.3141 at 1.2075 again.