AB=CD completion around 1.3320 offers attractive shorts today...
Up 1.04% on the day, the USD/CAD aggressively advanced northbound Tuesday on the back of a healthy USD across the board, along with a collapse observed in crude oil prices and comments from BoC’s Wilkins. Wilkins announced the central bank will review monetary policy framework in the run up to late 2021, indicating it is open to major changes.
In terms of weekly price, recent buying brought the market above resistance at 1.3223, with supply at 1.3540-1.3387 in view as the next upside target. Daily movement, on the other hand, overthrew resistance at 1.3260 (now acting support), potentially clearing the runway towards resistance plotted at 1.3347.
Here’s where it gets interesting! H4 price is currently hovering just south of a Quasimodo resistance level at 1.3329, which joins nicely with an AB=CD (black arrows) 127.2% bearish pattern at 1.3320 and a channel resistance (taken from the high 1.3132). This area – coupled with the nearby daily resistance mentioned above at 1.3347 (green H4 zone) – provides an awesome area of interest for sellers today.
Areas of consideration:
Should the market witness a H4 bearish candlestick formation take shape out of 1.3347/1.3320 today, this offers traders the opportunity to sell this market, targeting daily support at 1.3260 as the initial downside target.
The reason behind requiring additional candlestick confirmation simply comes down to the possibility of further buying being seen on the weekly timeframe towards the lower edge of weekly supply at 1.3387.
Today’s data points: US core durable goods orders m/m; US revised UoM consumer sentiment; Crude oil inventories.
In terms of weekly price, recent buying brought the market above resistance at 1.3223, with supply at 1.3540-1.3387 in view as the next upside target. Daily movement, on the other hand, overthrew resistance at 1.3260 (now acting support), potentially clearing the runway towards resistance plotted at 1.3347.
Here’s where it gets interesting! H4 price is currently hovering just south of a Quasimodo resistance level at 1.3329, which joins nicely with an AB=CD (black arrows) 127.2% bearish pattern at 1.3320 and a channel resistance (taken from the high 1.3132). This area – coupled with the nearby daily resistance mentioned above at 1.3347 (green H4 zone) – provides an awesome area of interest for sellers today.
Areas of consideration:
Should the market witness a H4 bearish candlestick formation take shape out of 1.3347/1.3320 today, this offers traders the opportunity to sell this market, targeting daily support at 1.3260 as the initial downside target.
The reason behind requiring additional candlestick confirmation simply comes down to the possibility of further buying being seen on the weekly timeframe towards the lower edge of weekly supply at 1.3387.
Today’s data points: US core durable goods orders m/m; US revised UoM consumer sentiment; Crude oil inventories.
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