Possible selling today, traders...
USD/CAD:
Although the US dollar index continued to explore lower ground Tuesday, the USD/CAD enjoyed another day in the sun. Crude oil ended the session down a whopping 6.50%+, therefore weighing on the Canadian dollar while simultaneously bolstering the US dollar.
As is evident from the H4 timeframe this morning, the candles established support on a retest of 1.34 before launching northbound to highs of 1.3496 yesterday. One reason for the pair halting just south of its 1.35 handle and mildly paring gains is the AB=CD bearish completion pattern (orange arrows). This could, according to the harmonic pattern’s take-profit rules, see the unit retreat towards the 38.2% Fibonacci support at 1.3403 today, followed closely by the 1.34 handle and then possibly the 61.8% Fibonacci support at 1.3345. Though before reaching this far south, traders may witness a rebound off 1.3444: the Dec 6 high (red arrow). It might also interest some traders to note the RSI indicator is seen displaying an overbought reading (green).
A look at this market from the higher timeframes, nevertheless, brings in weekly supply at 1.3540-1.3387, which houses the 2017 yearly opening level within at 1.3434. Note this level is struggling to hold firm. On the other side of the spectrum, daily flow recently crossed above resistance coming in at 1.3387 (essentially represents the underside of weekly supply) and made considerable headway during yesterday’s advance. This, by and of itself, possibly unlocks the door towards resistance priced in at 1.3533 (located within the upper limit of the current weekly supply).
Areas of consideration:
Further selling on the H4 timeframe is a strong possibility today. Not only do we have a clear-cut AB=CD bearish pattern in play, we also have weekly price engaging with supply at 1.3540-1.3387, despite recently overthrowing the 2017 yearly opening level at 1.3434. Entering at current price is still a possibility, with stop-loss orders positioned above 1.35. This offers more than a 1:1 risk/reward to 1.34, with the possibility of additional profits should the pattern complete at its 61.8% Fibonacci support mentioned above at 1.3345.
Today’s data points: FOMC Economic Projections; FOMC Statement and Federal Funds Rate; FOMC Press Conference; Canadian Inflation Figures.
Although the US dollar index continued to explore lower ground Tuesday, the USD/CAD enjoyed another day in the sun. Crude oil ended the session down a whopping 6.50%+, therefore weighing on the Canadian dollar while simultaneously bolstering the US dollar.
As is evident from the H4 timeframe this morning, the candles established support on a retest of 1.34 before launching northbound to highs of 1.3496 yesterday. One reason for the pair halting just south of its 1.35 handle and mildly paring gains is the AB=CD bearish completion pattern (orange arrows). This could, according to the harmonic pattern’s take-profit rules, see the unit retreat towards the 38.2% Fibonacci support at 1.3403 today, followed closely by the 1.34 handle and then possibly the 61.8% Fibonacci support at 1.3345. Though before reaching this far south, traders may witness a rebound off 1.3444: the Dec 6 high (red arrow). It might also interest some traders to note the RSI indicator is seen displaying an overbought reading (green).
A look at this market from the higher timeframes, nevertheless, brings in weekly supply at 1.3540-1.3387, which houses the 2017 yearly opening level within at 1.3434. Note this level is struggling to hold firm. On the other side of the spectrum, daily flow recently crossed above resistance coming in at 1.3387 (essentially represents the underside of weekly supply) and made considerable headway during yesterday’s advance. This, by and of itself, possibly unlocks the door towards resistance priced in at 1.3533 (located within the upper limit of the current weekly supply).
Areas of consideration:
Further selling on the H4 timeframe is a strong possibility today. Not only do we have a clear-cut AB=CD bearish pattern in play, we also have weekly price engaging with supply at 1.3540-1.3387, despite recently overthrowing the 2017 yearly opening level at 1.3434. Entering at current price is still a possibility, with stop-loss orders positioned above 1.35. This offers more than a 1:1 risk/reward to 1.34, with the possibility of additional profits should the pattern complete at its 61.8% Fibonacci support mentioned above at 1.3345.
Today’s data points: FOMC Economic Projections; FOMC Statement and Federal Funds Rate; FOMC Press Conference; Canadian Inflation Figures.
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