4- hour chart shows that:
- at the trading session last Friday, the consolidation within the price range of 1.3675 — 1.37525 ended with the breakdown of its upper line, which led to increasing of bullish engulfing. The practice of our goals 1.3820 and 1.3875 ended in the beginning of the American session. According to fundamental analysis, the reason for the significant weakening of the Canadian dollar (CAD) is negative data of the labor market in Canada for January;
- bullish engulfing has subsided only near mirror level1.39075;
- since the opening of today's trading session bearish engulfing are manifested poorly expressed in currency pair.
Let’s look at the indicators:
The currency is still below the moving averages with of 34, 55, 89 and 144 periods which are directed downwards and indicate bearish engulfing (mid-term) and are also the resistance levels of 1.3900, 1.3970, 1.41275 and 1.4165.
The MACD histogram is still located in the negative zone, but above its signal line; it continues rise smoothly and thereby signal for buying USD/CAD.
Oscillator stochastic is in the oversold area, it forms not clear, but opposite signal as the %K line just crossed the %D top-down, but hasn’t begun to fall below it yet.
Despite the contradiction in the signals, we expect the pressure on USD/CAD continues, and bears potential targets located on 1.3800 and 1.37525.
The cancel of the ‘bearish scenario’ will happen only in case of breaking mirror level 1.39075 which can open the way to 1.4000 and 1.3945 levels.
To the attention of Forex, today at 20:05 MSK. the Deputy Governor of the Bank of Canada Timothy lane will deliver a speech on ‘Monetary policy and financial stability — using the right tools’ in Montreal higher commercial school (HEC). Unexpected statements can have a significant impact on further developments in this currency pair.
Note that the text of the speech will be published 15 minutes before the performance.
Resistance levels: 1.3900, 1.39075, 1.3945, 1.3970, 1.4000
Actual price: 1.3865
