Possible buying above 1.34...
The Canadian dollar strengthened Tuesday, buoyed by advancing oil prices, a weakening dollar and comments from Bank of Canada’s Governor Poloz.
From a technical standpoint, the USD/CAD’s H4 candles settled a few points sub 1.34, though connected with a trend line resistance-turned support etched from the high 1.3443 and a 161.8% ABCD (black arrows) bullish pattern at 1.3388. Note we also have a 50.0% support value just above at 1.3398 (green zone). It might also interest some traders to note the RSI indicator (blue line) is currently printing hidden bullish divergence (whereby price leads the way as opposed to the indicator).
Longer-term flow sees weekly movement reclaim position beneath its 2017 yearly opening level at 1.3434, potentially opening up a run towards trend line support taken from the low 1.2247. In addition to the weekly timeframe’s position, the daily candles re-entered its symmetrical pennant formation in strong fashion yesterday. This could, according to our technical studies, draw in further selling and target the opposing edge of the pennant drawn from the low 1.3250.
Areas of consideration:
Despite both weekly and daily action suggesting lower prices could be in store, the confluence on the H4 timeframe, indicating we may be heading back above 1.34 and higher, is likely enticing for a number of traders, particularly those who trade using harmonics.
With the green H4 zone at 1.3388/1.34 being somewhat small in size, waiting for a H4 close to form back above 1.34 and buying the breakout candle (entry at the close with a stop beneath its extreme) could be an option, targeting 1.3450ish as an initial upside base.
Today’s data points: US ADP Non-Farm Employment Change; US ISM Manufacturing PMI; FOMC Statement, Press Conference and Federal Funds Rate; BoC Gov. Poloz Speaks.
From a technical standpoint, the USD/CAD’s H4 candles settled a few points sub 1.34, though connected with a trend line resistance-turned support etched from the high 1.3443 and a 161.8% ABCD (black arrows) bullish pattern at 1.3388. Note we also have a 50.0% support value just above at 1.3398 (green zone). It might also interest some traders to note the RSI indicator (blue line) is currently printing hidden bullish divergence (whereby price leads the way as opposed to the indicator).
Longer-term flow sees weekly movement reclaim position beneath its 2017 yearly opening level at 1.3434, potentially opening up a run towards trend line support taken from the low 1.2247. In addition to the weekly timeframe’s position, the daily candles re-entered its symmetrical pennant formation in strong fashion yesterday. This could, according to our technical studies, draw in further selling and target the opposing edge of the pennant drawn from the low 1.3250.
Areas of consideration:
Despite both weekly and daily action suggesting lower prices could be in store, the confluence on the H4 timeframe, indicating we may be heading back above 1.34 and higher, is likely enticing for a number of traders, particularly those who trade using harmonics.
With the green H4 zone at 1.3388/1.34 being somewhat small in size, waiting for a H4 close to form back above 1.34 and buying the breakout candle (entry at the close with a stop beneath its extreme) could be an option, targeting 1.3450ish as an initial upside base.
Today’s data points: US ADP Non-Farm Employment Change; US ISM Manufacturing PMI; FOMC Statement, Press Conference and Federal Funds Rate; BoC Gov. Poloz Speaks.
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