Type :
Bearish Drop
Key Levels:
Resistance : 0.77455
Pivot: 0.76955
Support : 0.76460
Preferred Case:
On the H1, price is moving below the ichimoku cloud and along the descending trendline which gives us a bearish bias that prices will drop to the pivot at 0.76955 where the 50% fibonacci retracement and swing low support are. Once there is downside confirmation that price has dropped to pivot , we would expect bearish momentum to carry prices to 1st support at 0.76460 where the swing low support, 78.6% fibonacci projection and 161.8% fibonacci extension are.
Alternative scenario:
Alternatively, price may rise to the 1st resistance level at 0.77455 in line with the swing high resistance, 78.6% fibonacci retracement and 78.6% fibonacci projection .
Fundamentals:
A stronger than expected CPI data (Actual: 1.4% Expected 1.0%) overnight helped the CAD find some strength against the USD. With the CPI data reinforcing market expectation for the BoC to hike rates by 75bps at the next meeting, look for the CAD to continue strengthening into the US session, giving us a medium bullish bias for the canadian dollar .
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Desmond Leong runs an award-winning research firm (The Technical Analyst finalists 2018/19/20 for Best FX and Equity Research) advising banks, brokers and hedge funds. Backed by a team of CFA, CMT, CFTe accredited traders, he takes on the market daily using a combination of technical and fundamental analysis.