Possible buying opportunity off 1.33 should we see a pullback
The Canadian dollar is Tuesday’s G10 underperformer, amid a decline in oil, the US dollar index preserving strength above the 96.30 mark and lower-than-expected Canadian wholesale sales and manufacturing sales numbers.
Since Jan 11, as highlighted in Tuesday’s briefing, the H4 candles have been compressing within an ascending channel formation (1.3183/1.3318). With the recent bout of buying observed, which happened to clean orders from 1.33, the unit is seen testing the H4 channel resistance, as we write. Beyond this structure, a demand-turned resistance area is present at 1.3420-1.3390, which happens to hold within it the round number 1.34 and a 161.8% Fibonacci extension point at 1.3403. In addition to this, the H4 RSI indicator recently entered overbought territory alongside a divergence reading (blue line).
Against the backdrop of H4 flow, the bigger picture reveals weekly support holding firm at 1.3223, with the current candle poised to cross swords with the 2017 yearly opening level at 1.3434. Closer analysis on the daily timeframe reveals the unit shook hands with a daily Quasimodo support at 1.3181 in recent trade. This level, as you can see, is situated just south of the current weekly support level. As long as the buyers continue to defend the said supports, the next port of call to the upside from here falls in around trend line support-turned resistance (extended from the low 1.2782), though it appears weekly resistance may enter the fray beforehand.
Areas of consideration:
As both weekly and daily structure suggest buyers govern movement at the moment, a retest off 1.33 is likely of interest to many traders today (red arrows), targeting the H4 supply zone mentioned above at 1.3420-1.3390 as an initial take-profit zone.
As mentioned in previous reports, stop runs through round numbers are common viewing, therefore, waiting for additional bullish candlestick confirmation to form (entry/stop parameters can be defined according to this pattern) off 1.33 before pressing the buy button is recommended.
Today’s data points: Canadian Core Retail Sales m/m and Retail Sales m/m.
Since Jan 11, as highlighted in Tuesday’s briefing, the H4 candles have been compressing within an ascending channel formation (1.3183/1.3318). With the recent bout of buying observed, which happened to clean orders from 1.33, the unit is seen testing the H4 channel resistance, as we write. Beyond this structure, a demand-turned resistance area is present at 1.3420-1.3390, which happens to hold within it the round number 1.34 and a 161.8% Fibonacci extension point at 1.3403. In addition to this, the H4 RSI indicator recently entered overbought territory alongside a divergence reading (blue line).
Against the backdrop of H4 flow, the bigger picture reveals weekly support holding firm at 1.3223, with the current candle poised to cross swords with the 2017 yearly opening level at 1.3434. Closer analysis on the daily timeframe reveals the unit shook hands with a daily Quasimodo support at 1.3181 in recent trade. This level, as you can see, is situated just south of the current weekly support level. As long as the buyers continue to defend the said supports, the next port of call to the upside from here falls in around trend line support-turned resistance (extended from the low 1.2782), though it appears weekly resistance may enter the fray beforehand.
Areas of consideration:
As both weekly and daily structure suggest buyers govern movement at the moment, a retest off 1.33 is likely of interest to many traders today (red arrows), targeting the H4 supply zone mentioned above at 1.3420-1.3390 as an initial take-profit zone.
As mentioned in previous reports, stop runs through round numbers are common viewing, therefore, waiting for additional bullish candlestick confirmation to form (entry/stop parameters can be defined according to this pattern) off 1.33 before pressing the buy button is recommended.
Today’s data points: Canadian Core Retail Sales m/m and Retail Sales m/m.
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