USDCAD Weekly Technical Outlook
As noted on this thread three weeks ago (on Sunday April 30, 2017), price action on the pair has been operating in an ascending channel on the weekly time frame since mid-2016. In January and February 2017, price action moved to the lower part of the channel. It surged upwards in the latter part of February 2017 and flagged downwards to the lower part again in March and early part of April. Since the beginning of this month, price action has disposed northwards. On the weekly time frame, the gravestone doji candlestick formed two weeks ago gave way to a northward directional candlestick last week although sellers’ pressure limited its momentum. Presently, price action is operating near a resistance zone which was last visited in February 2016. Should price action breach the zone, it has to contend with the resistance line of the channel very close by. We may expect some sideways operation in this area before the market makes a decision to either reject the channel southwards or breach it to the upside. At any rate, the momentum for an upward movement appears suspect at the moment.
On the daily time frame, price action has breached the resistance of the channel and formed wicky candlesticks at the immediate resistance zone noted on the weekly time frame. The formation of wicky candlesticks indicate a slow down in upward momentum. Although the technicals on the daily time frame favor a northward disposition, a barrier is the minor resistance zone which is less than 55 pips away around 1.38307. On the flip side, should price retrace southwards into the channel, a likely support can be found around 1.35838, which adjoins the 38.2 Fib level of the most recent swing high from the low of April 13.
Alternative technical biases
Main direction: northwards, particularly should price action break above 1.38307
Short-term disposition: southwards, likely retracement from within the zone of current price location to around 1.35838
I may be wrong. Trade safe and prosper.