USD/CAD gained for a fourth successive session Tuesday, adding 0.20%. WTI gained 15%, a day after the market registered a 27% down move; the US dollar index, prompted by a recovery in US Treasury yields, also firmed Tuesday, reclaiming 96.00+ status and reaching 96.50.
The technical picture on the weekly timeframe for USD/CAD has price eyeing the 2016 yearly opening level at 1.3814 after thrashing Quasimodo resistance at 1.3520, now a serving support. Support on the daily timeframe at 1.3653 remains in play, withstanding a notable downside attempt during Tuesday’s session. Resistance at 1.3807 is visible as the next upside target on this scale.
A closer read on the H4 timeframe saw price action come within striking distance of 1.38, before chalking up a sharp v-shaped top, poised to retest 1.37 as possible support. While headspace beneath 1.37 appears reasonably free to 1.36, traders are urged to pencil in daily support highlighted above at 1.3653.
In the event of a break south of 1.37, movement to daily support at 1.3653 is likely, with a breach here underlining 1.36. This may be of interest to short sellers.
Should we recover and cross paths with 1.38, a fakeout above the level is likely, with weekly resistance at 1.3814 and daily resistance at 1.3807 calling for attention. Note buy-stop liquidity north of 1.38 will likely entice sellers, and pitch the candles south of 1.38.
Both scenarios are considered countertrend, however.
Disclaimer: The information contained in this material is intended for general advice only.