Daily doji on the USD/CAD

The USD/CAD has made a good bearish bounce from the 200 day EMA and the 1.3200 zone towards the 1.3100 level. Once it got to the 1.3100 level, the pair bounces to the upside, but it does not gain enough bullish momentum and forms a “doji” on the last daily candle. The doji formation is an indecision Japanese candlestick pattern, which indicates exhaustion and uncertainty. From this point on, the USD/CAD could head in any direction, but due to the fact that the previous candle to the doji is a bearish candle, the price could try to head higher. However, the 1.3200 level along with the 200 day EMA could act once again as resistance. Above the 1.3200 level, its next resistance could be the 1.3300 level and below the 1.3100 level, its next support could be the 1.3000 level.

Descending triangle on the USD/JPY

The USD/JPY has found a good support zone around the 112.00 level and even though it has broken that level momentarily, it has not been able to continue falling from there. The highs of the daily candles have been lower than the previous ones, forming a descending triangle. On the descending triangle formation, the pressure accumulates to the downside, raising the probabilities of a bearish breakdown. To the downside, the 200 day EMA (blue line) around the 110.38 level could act as a support. Below the 200 day EMA, the 109.00 level could also act as support. If the price breaks to the upside, above the triangle, then the 114.00 level could act as resistance. The 55 day EMA (purple line) is changing its direction to the downside, indicating a possible bearish trend reversal.

WTI oil plummets

According to the US oil inventories, the production of oil in the North American country has been rising, causing the price of WTI oil to drop from the resistance zone at the 54.00 level and dropping below the 52.00 level. Right now the price of crude is finding some support at the 55 day EMA (purple line), but if it confirms a breakdown below that zone, oil could try to reach the 50.00 level. Below the 50.00 level, its next support level could be the 200 day EMA (blue line), around the 48.41 level. In case the price goes back up, it would be entering the congestion area between the 52.00 level and the 54.00 level where it has been since the beginning of December. From that consolidation zone the price has no clear trend.

The Pound is stuck at the 55 EMA

The GBP/USD has come back to the 55 day EMA and stays stuck at that level, around the 1.2437 zone. The 55 day EMA is acting once again as a support for the pair, but a breakdown of that zone could accelerate the drop towards the 1.2300 level. The more the price tests a support or resistance, the faster it accelerates in direction of the breakout. In the case of the GBP/USD daily chart we can see that the price has already tested the 55 day EMA three times; therefore, the drop could be significant in case it breaks below it. To the downside, below the 1.2300 level, the next support levels could be any of the round number zones like the 1.2200, the 1.2100, or the 1.2000. In case the pair bounces to the upside from the 55 day EMA, it may try to go and visit the 1.2600 level, but it has to confirm breakout of that zona in order for the GBP/USD to go back to its bullish trend. Above the 1.2600 level, its next resistance could be the 1.2800 level.

The USD/CAD comes back to the 1.3000 level

The USD/CAD on the daily chart has already touched three times the 1.3000 level during this week, but it has not been able to confirm a breakdown below that level. The highs of the daily candles have been lower than the previous ones, showing us that the downward pressure is accumulating around that zone. If oil keeps rising during the next week, then the USD/CAD may break below the 1.3000 level due to the correlation between oil and the Looney. Below the 1.3000 level, its next support could be the 1.2900 level. To the upside, the 1.3100 level may act as resistance, followed by the 1.3200 zone where we can find the 200 day EMA. However, the bearish trend is still in place for the USD/CAD and the pair may continue falling.

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Hammer formation on the GBP/JPY

The hammer formation is a Japanese candlestick bullish reversal pattern. The pattern is formed when the price has been falling, but it gets to a level from where it goes back up during the same session of the candlestick and leaves a relatively long lower shadow to close almost at the same level where it opened. The color of the candlestick is irrelevant, what it really matters is that the price has closed almost at the opening level at the end of the session. The long lower shadow is telling us that the buyers have taken control of the market. If the following candle is bullish, then that confirms the pattern and the price may continue heading higher as we can see on the daily chart of the GB/JPY. We can see on the chart that if the price continues heading higher, then it may find some resistance around the 145.41 level. To the downside, the 143.00 level may act as a temporary support, but the low of the hammer candle at the 140.44 level may act as a better support.