CAD Technical Analysis

-Measured objectives from the breakout above the 2011 high range from 1.1680 to 1.1910. The Jul 2009 high rests in this zone at 1.1724 and the 2007 high is near the top of the zone at 1.1875.
-The rate has responded to support (1.0990). This is a good place for the larger rally to resume although Tuesday’s outside day warns that the drop isn’t complete.
LEVELS: 1.0904 1.0953 1.0999 | 1.1076 1.1132 1.1216

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-Measured objectives from the breakout above the 2011 high range from 1.1680 to 1.1910. The Jul 2009 high rests in this zone at 1.1724 and the 2007 high is near the top of the zone at 1.1875.
-The market has entered an area that could produce the next important low.
LEVELS: 1.0858 1.0904 1.0953 | 1.1036 1.1076 1.1132

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Talking Points

• USD/CAD Technical Strategy: Hammer Confirmation to Offer Bullish Bias
• Downtrend continues, suggesting caution needed when trading an upside reversal
• Noteworthy buying support at 1.0900 may limit further declines for the Loonie

USD/CAD has shrugged off previous signs of a potential reversal as the pair continues to decline further. This suggests caution is needed when looking at trading the most recent Hammer candlestick pattern on the daily. Confirmation is needed from a successive up-day to suggest the formation is a more meaningful indication of a turnaround for the Loonie. Important support for the pair lies close by at the psychologically significant 1.0900 handle.

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Talking Points:

• USD/CAD Technical Strategy: Flat
• Support: 1.1053-61 (Feb 25 low, 14.6% Fib exp.), 1.0909 (Feb 19 low)
• Resistance: 1.1155 (23.6% Fib exp.), 1.1194 (Feb 21 high), 1.1223 (Jan 31 high)

Prices remain locked in a choppy range below resistance at 1.1155, the 23.6% Fibonacci expansion. A break higher on a daily closing basis exposes recent swing highs in the 1.1194-1.1223 area, followed by the 38.2% level at 1.1307. Near-term support is in the 1.1053-61 region, defined by the February 25 low and the 14.6% Fib. A reversal beneath this barrier exposes the February 19 low at 1.0909.

A long position at current levels is premature absent a confirmation on a break above resistance. Meanwhile, a short trade looks unattractive from a risk/reward perspective with the pair sitting squarely at near-term support. We will opt to remain flat for the time being.

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


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Talking Points

• USD/CAD Technical Strategy: Range trading preferred
• Range on the daily remains in force (1.0900 – 1.1200)
• Awaiting bearish reversal signal on four hour chart

As noted in yesterday’s candlesticks report; USD/CAD presented a range-trade setup following a test of the support level at 1.1050. With the range-top at 1.1160 acting to cap the pair’s advance, a bearish reversal signal on the four hour chart would open a new selling opportunity.

The potential for an intraday bounce for USD/CAD was signaled by the Bullish Engulfing candlestick pattern pictured in the four hour chart below. The formation was made more noteworthy by its appearance near the 61.8% Fib Retracement level. With the bulls seemingly running out of steam, a bearish reversal candle would be taken as a new opportunity to enter short in order to keep playing the range.

USD/CAD: Range-Top Favors Shorts



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Dual Breakouts in Play Right Now in CAD/JPY

Talking Points:

• 2 Breakouts on CAD/JPY Daily Chart
• Consolidation Pattern & Key Support Zone
• The Ideal Time Frame for Initiating New Longs

Trend line analysis can usually be done in a straightforward yet powerful manner. However, on occasion, there arises the potential for interesting combinations, and today's trade is one such example.

As seen on the daily chart below of CADJPY, the original downtrend was broken at the end of March. As the rising channel shows, the expectation was that an uptrend could have developed. However, the latest break of the rising support line suggests either that the downtrend could be resuming, or that a larger consolidation area is developing.

Guest Commentary: Dual Breakouts on CAD/JPY Daily Chart



Regardless of whether it is starting a downtrend or simply a consolidation, price is expected to at least test the underside of the trend line before confirming that the uptrend has truly ended. Thus, the most immediate trade is to the long side. If the break turns out to be false, then there could well be a journey of 250 pips or more to retest the highs. If it proves true, however, there would be more than 60 pips before price tests the trend line again.

The four-hour chart below offers a slightly different perspective on this trade, as it sketches out a sideways consolidation. The depth of this range is approximately 90 pips, which leaves plenty of room for long trades to unfold.

Guest Commentary: Key Support Zone for Buying CAD/JPY



The chosen support zone is defined as 92.10-92.37, and it is actually an interesting study in itself. The higher value is the approximate area of the recent lows. However, the best trade would actually occur if price dips slightly lower than the recent low, creating "head-fake" scenario.

By textbook theory, this would cause the bears to begin selling on the breakout. Should price then turn back up, the momentum generated by sellers hastily covering their positions should help springboard price back up to (perhaps quickly) test the top of the range.

The hourly chart below is notable for how featureless it is in relation to the other patterns. Besides a potential declining channel, there is little to be said for this decline. This is worth noting, as it means that many of the recent swings have overlapped with one another.

Guest Commentary: Ideal Time Frame for New CAD/JPY Longs



Even though the general movement has been mildly bearish, it essentially shows a market that could develop into a trend rather suddenly. Of course, it is hoped that this trend will be in the upward direction, but it could also be to the downside. As there is no way of telling until history is created, the best response is to trade the long side on signs such as bullish reversal divergence, bullish engulfing patterns, and/or pin bars on the short-term time frames.

Risk is likely to be quite small for this trade given that the average candlestick is approximately only ten pips deep at this hourly level of magnification. This certainly helps to justify taking this trade, and also justifies taking two or three tries at the entry in order to successfully capitalize on a potential upside move.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com


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Daily price is located below SMA with period 100 (100 SMA) and below SMA with the period 200 (200 SMA): the price was bounced from 78.94 support level for the secondary bear market rally to be started.

• If the price will break 92.77 resistance level so the reversal of the price movement from the primary bearish to the primary bullisgh market condition will be started.
• If price will break 78.94 support so the bearish trend will be continuing.
• If not so the price will be ranging within the levels.

Resistance	Support
87.41	78.94
92.77	N/A

• Recommendation to go short: watch the price to break 78.94 support level for possible sell trade
• Recommendation to go long: watch the price to break 92.77 resistance level for possible buy trade
• Trading Summary: rally

SUMMARY : bear market rally

M5 price is located within SMA with period 100 (100 SMA) and SMA with the period 200 (200 SMA) waiting for the direction for the possible breakout or breakdown.

• If the price will break 86.18 resistance level so we may see the bullish trend to be started on this timeframe.
• If price will break 85.97 support so the price will be reversed to the primary bearish condition.
• If not so the price will be ranging within the levels.

Resistance	Support
86.09	85.97
86.18	N/A

• Recommendation to go short: watch the price to break 85.97 support level for possible sell trade
• Recommendation to go long: watch the price to break 86.18 resistance level for possible buy trade
• Trading Summary: ranging

SUMMARY : ranging

TREND : waiting for direction

Daily price is located near and above Ichimoku cloud for the bullish market condition with the ranging on the bearish reversal.

If price will break 82.63 support level so the bearish reversal of the daily price movement will be started.
If price will break 85.44 resistance level so the primary bullish trend will be continuing.
If not so the price will be ranging within the levels.

Resistance	Support
85.44	82.63
88.78	81.69

• Recommendation for long: watch close price to break 85.44 for possible buy trade
• Recommendation to go short: watch price to break 82.63 support level for possible sell trade
• Trading Summary: ranging

CAD/JPY : 697 pips price movement by Brexit Referendum Final Results