• Last Candlesticks pattern: Shooting doji
• Time of formation: 01 May 2017
• Trend bias: Sideways
• Last Candlesticks pattern: Bearish engulfing
• Time of formation: 5 May 2017
• Trend bias: Down
USD/CAD – 1.2425
As the greenback staged a strong rebound after finding good support at 1.2198 last week, suggesting a temporary low has possibly been formed at 1.2061 earlier this month and consolidation with mild upside bias is seen for this move to bring retracement of recent decline, hence gain to 1.2515-20 and possibly towards the lower Kumo (now at 1.2624), however, reckon resistance at 1.2663 would limit upside and price should falter well below resistance at 1.2778, bring another decline later.
On the downside, whilst initial pullback to 1.2400 and then the Tenkan-Sen (now at 1.2345) cannot be ruled out, reckon downside would be limited to 1.2280-85 and renewed buying interest should emerge above said support at 1.2198, bring another rebound later. A daily close below 1.2198 would risk weakness to 1.2121 but break there is needed to abort and signal the rebound from 1.2061 has ended, bring further fall towards said recent low at 1.2061. Looking ahead, below 1.2061would extend downtrend to psychological level at 1.2000, having said that, loss of momentum should prevent sharp fall below 1.1920-25 (61.8% projection) and 1.1900 should hold.
Recommendation: Turn long at 1.2200 for 1.2400 with stop below 1.2100
On the weekly chart, the greenback has continued edging higher after rebounding from 1.2061, third consecutive white candlestick looks set to be formed this week, suggesting a temporary low has possibly been formed at 1.2061 and consolidation with mild upside bias is seen for retracement of recent decline, hence gain to 1.2550, then 1.2600 would be seen, however, reckon previous resistance at 1.2663 would limit upside and 1.2700-10 should hold, price should falter below previous resistance at 1.2778, bring another decline later in Q4.
On the downside, expect pullback to be limited to 1.2350-60 and 1.2280-85 should hold, renewed buying interest should emerge around support at 1.2198, bring another rebound later to aforesaid retracement targets. Below 1.2121 support would abort and signal the rebound from this month’s low at 1.2061 has ended, bring retest o this level later. A drop below 1.2061 would confirm decline from 1.3794 top has resumed and extend weakness towards psychological support at 1.2000, however, reckon downside would be limited to 1.1920-25 (61.8% projection of 1.3794-1.2414 measuring from 1.2778) and reckon 1.1840-50 would hold from here, price should stay above 1.1750-60, bring rebound later.