CAD Technical Analysis

Talking Points:

• USD/CAD Technical Strategy: Flat
• Support: 1.2328, 1.2181, 1.2035
• Resistance: 1.2494, 1.2646, 1.2827

The US Dollar turned lower against its Canadian counterpart as expected after putting in a Bearish Engulfing candlestick pattern.

Near-term support is in the 1.2328-81area, marked by the 38.2%Fibonacci retracement and the January 27 low, with a break below that on a daily closing basis exposing the 50% level at 1.2181. Alternatively, reversal above trend line support-turned-resistance at 1.2494 opens the door for a challenge of the 23.6% Fib expansion at 1.2646.

Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.

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Talking Points:

• USD/CAD Technical Strategy: Flat
• Support: 1.2328, 1.2181, 1.2035
• Resistance: 1.2564, 1.2646, 1.2827

The US Dollar continues to oscillate in a range above the 1.23 figure against its Canadian counterpart having begun a downward reversal as expected. Near-term support is in the 1.2328-81area, marked by the 38.2%Fibonacci retracement and the January 27 low, with a break below that on a daily closing basis exposing the 50% level at 1.2181. Alternatively, a turn above trend line resistance at 1.2564 opens the door for a challenge of the 23.6% Fib expansion at 1.2646.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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Talking Points:

• USD/CAD Technical Strategy: Flat
• Support: 1.2635, 1.2354, 1.2239
• Resistance: 1.2801, 1.2968, 1.3158

The US Dollar has moved to challenge January’s swing high against its Canadian counterpart near the 1.28 figure. Near-term resistance is in the 1.2733-1.2801 area, marked by the 23.6% Fibonacci expansion and the January 30 high, with a break above that on a daily closing basis exposing the 38.2% level at 1.2968. Alternatively, a turn below range top resistance-turned-support at 1.2635 clears the way for a test of the February 3 low at 1.2354.

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.

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Talking Points

• EUR/USD nears key upside pivot
• SPX fails again at key resistance
• USD/CAD nearing technical inflection

EUR/USD

• EUR/USD has traded fairly steadily higher after reversing from a key Gann level related to last year’s high around the middle of the month
• Our near-term trend bias is positive on the euro while above 1.0760
• The highs from last week around 1.1040 remain a clear upside attraction/reaction zone
• A very minor turn window is eyed tomorrow
• Only weakness below 1.0760 would turn us negative again on the euro.

EUR/USD Strategy: Like buying the euro on dips while 1.0760 holds.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	1.0760	1.0855	1.0975	1.1040	1.1065

S&P 500

• S&P 500 has stalled again near the key resistance zone between 2108 and 2125
• Our near-term trend bias is higher in in the index while over 2040
• Traction over 2125 is needed to set off a more meaningful push higher in the index
• A very minor turn window is later this week
• A close below 2040 would turn us negative on the index

S&P 500 Strategy: Like the long side while over 2040.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
S&P 500	2040	2069	2091	2108	2125

Focus Chart of the Day: USD/CAD


Most of G10 FX looks to be at an important technical juncture given where the US Dollar Index sits. However, USD/CAD is especially starting to standout. After trading to a new 6-year high last week, Funds reversed sharply after the FOMC leaving one of the widest daily ranges in years on the most turnover in years. From a technical standpoint that is a pretty clear red flag of a market in fatigue and prone to a deeper correction. When you factor in that the pair basically failed around the old January highs setting up a possible “double top” the picture gets even more potentially ominous. All that said, we have to say “potentially” because as bad as the chart looks the exchange has yet to do anything seriously wrong. A sequence of higher highs and higher lows defines an uptrend and so far USD/CAD has maintained that despite all the negatives we have mentioned. A break of the February lows around 1.2360 is needed to definitively change things and usher in the more negative regime we fear. A move back over 1.2610 is needed to alleviate some of the immediate downside pressure, but only a close back over 1.2715 would signal that the exchange rate is trying to resume the broader uptrend.


--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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Talking Point

• EUR/USD threatening to trigger a double top
• Crude stalls ahead of pivotal resistance
• USD/CAD range break looming?

EURUSD

• EUR/USD has come under steady pressure following the latest failure near 1.1040
• However, our near-term trend bias remains positive on EUR/USD while above 1.0685
• A move through 1.1040 is desperately needed to set off a more important push higher in the exchange rate
• A very minor turn window is eyed tomorrow
• A close under the 61.8% retracement of the mid-March range at 1.0685 would turn us negative on the euro

EUR/USD Strategy: Square

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	1.0645	1.0685	1.0730	1.0825	1.1040

Price & Time Analysis: CRUDE

• CRUDE has marched steadily higher from the cycle turn window in mid-March
• Our near-term trend bias is higher in the commodity while above 47.00
• A move through 54.00 is needed to set off a more important leg higher
• A minor turn window is seen around the end of the week
• A close below 47.00 would turn us negative on the commodity

CRUDE Strategy: Like the long side while over 47.00

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
CRUDE	47.00	50.00	51.60	53.00	54.00

USDCAD

The USD/CAD range continues. The exchange rate teased the market again yesterday as a break of the 1.2830-1.2350 range looked all but inevitable following the move below the trendline connecting the February lows around 1.2435. It clearly was not meant to be, however, as the pair reversed sharply from just above the February lows to trade back towards the middle of the range this morning. Our view on the rate remains generally the same as last week. The wide range reversal on some of the highest volume in years after the FOMC last month is a clear potential negative, but until or unless we convincingly break the range lows at 1.2350 there is really little reason to read too much into this situation and waste precious mental capital. A daily settlement over 1.2830 would obviously turn the outlook much more positive.


--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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USDCAD M5: 60 pips price movement by CAD - Employment Change news event :

Talking Points

• USD/JPY flirting with important downside pivots
• GBP/USD near key Fib zone
• USD/CAD breaks multi-week range

USDJPY

• USD/JPY has come under steady pressure since failing near the 61.8% retracement of the March range at the start of the week
• Our near-term trend bias is lower while below 120.90
• Gann levels at 118.70 and 118.40 look critical and a move below them is needed to spark a more serious decline
• A minor turn window is eyed today/tomorrow
• Only a move through 120.90 would turn us positive on the exchange rate

USDJPY Strategy: Like the short side while under 120.90

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/JPY	118.40	118.70	119.10	119.50	120.90

GBPUSD

• GBP/USD has traded steadily higher since finding support earlier this week at the 261.8% extension of the January/February advance
• Our near-term trend bias is now higher in Cable
• The 38% retracement of the February/April decline at 1.4940 looks to be a key pivot with traction above needed to spark a more important leg higher
• A very minor turn window is eyed tomorrow
• A daily close under 1.4680 would turn us negative on the pound

GBPUSD Strategy: Looking to buy on weakness

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
GBP/USD	1.4680	1.4800	1.4915	1.4940	1.5050

USDCAD

We have been suspicious of the action in USD/CAD since the dramatic reversal on the FOMC decision last month. It was one of the widest daily ranges in years on some of the highest volume in years. A textbook sign of exhaustion – especially after just seeking out a new high. Our fears were realized yesterday as the February lows were breached leading to another high volume liquidation. We can only assume that this decline has more to run given the clear potential overhang of “stale longs” after several weeks of range trade. Another interpretation of the price action is that a head & shoulders pattern has been triggered on the move through 1.2450. If this is the case, it could open the way for a move to 1.2000. We shall see. It is USD/CAD after all and a curve ball or two is the rule not the exception. Immediate resistance is seen at 1.2350 and 1.2450, but only a move over 1.2665 would turn the technical outlook positive.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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Talking Points:

• USD/CAD Strategy: Flat
• Topping Pattern Awaits Follow-Through
• Fib Support Above 1.24 Figure in Focus

The US Dollar declined against its Canadian counterpart as expected having marked a top with bearish Dark Cloud Cover and Bearish Engulfing candlestick patterns as well as negative RSI divergence. Support is now at 1.2078, the 23.6% Fibonacci retracement, with a break below that exposing the 38.2% level at 1.1611. Alternatively, a turn back above the 14.6% Fib at 1.2366 targets the March swing high at 1.2834.

The overall USD/CAD trend continues to favor the upside. With that in mind, we will look to current weakness as an opportunity to establish a long position at more attractive levels once the downswing is exhausted.

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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My USD/CAD strategy for today is to open a buy at 1.2260 with a stop-loss at 1.2250. I'm going to close the deal at 1.2505

USD/CAD is currently in stagnation phase. I guess it's just for a while, but I prefer better opportunities to trade, so now I'll get a break.