Price is currently at 1.2307 after rejection of the key level resistance - Would anticipate the downward momentum will resume following this.
4 Hour Fibonacci movement can be seen with price retracing to the 38% level before rejection and consolidation at this point.
Daily Fibonacci is also in action with price retracing to the 61% level and having a number of rejections of the resistance at this level.
MA crossover to the downside is also impending on the which will also add further confluence to a sell trade
The DXY is also showing further weakness which will add further confirmation to the short of this pair
The weekly candle formation highlights a strong nature of price meaning the long-term bias of the price should be short
Fundamental News to be aware of:
- USD - Building Permits - Forecast to fall
- USD - Fed Interest Rate Decision - Forecast to remain same
- USD - FOMC Economic Projections
- USD - Fed Chair Yellen Speaks
- USD - Core CPI (MoM) - Forecast to fall
- USD - Philadelphia Fed Manufacturing Index - Forecast to improve
- CAD - Core Retail Sales (MoM) - Forecast to fall
- CAD - Core CPI (MoM) - Forecast to improve
Target 1 = 1.2241 which is above the 0% 4 hour Fib level and confluent with a previous key level and a medium term uptrend line
On breaking this, a second target could be established to the 1.2180 key level but would need to see further confirmations from price action in order to enter.
Bias of the pair was proven to be correct, as shown in the above chart.
Price was stuck in a range for the early part of the week and retested the 38% Fib and key level numerous times which reaffirmed its resistance.
A strong bearish move then saw price break through the range and uptrend, confirming bearish action of price had begun
After take profit was achieved, price then began to retrace towards the trend line again, which represented a potential retest.
Analysis for next week will involve looking at how price will react to the current key level it is testing as well as understanding the direction of DXY for the coming week