The USD/CAD in a range

The USD/CAD has been stuck in a well-defined range during the last 8 trading sessions as shown on the daily chart. The USD/CAD consolidates between the 1.2753 level as support and the 1.2913 level as resistance. Above the 1.2913 level, the next resistance level is the 1.3000 level and above the 1.3000 level, the most relevant resistance is the peak at the 1.3123 level. To the downside, the 200 day EMA is located at the 1.2753 level and below that zone its next support could be the low at the 1.2526. The USD/CAD may breakout in any direction, we cannot be sure in which direction the pair may head next due to the fact that there is no clear trend. The 55 day EMA is actually horizontal and that is an indication that there is no clear direction on this instrument.

The USD/JPY keeps its bullish momentum

On the daily chart of the USD/JPY we can see that the pair has accelerated its bullish momentum above the 110.00 level and comes very close to the 111.00 zone. The pair may find some resistance at the 111.00 level from where it may bounce to the downside. In case of a bearish pullback, the USD/JPY may fall to the 110.00 level, which may act as support. In the past, the 110.00 level acted as resistance and now it may change its function to support. Below the 110.00 level we can see that the pair has been oscillating around its 200 day EMA, blue line, therefore its next support level could be the low at the 108.63 level where we can also find the 55 day EMA, purple line. To the upside, in case of a bullish breakout above the 111.00 level, its next resistance could be the 112.00 level.

Will WTI oil break to the upside?

WTI oil has found a very good resistance zone around the 72.00 level as shown on the daily chart. The price has already tested that level a few times since last week and due to the fact that the daily candle lows are higher than the previous ones, which is an indication that the pressure is accumulating to the upside. Therefore, we could see a bullish breakout of the 72.00 level. Above the 72.00 level we do not have any more important resistances until the 77.13 level where we can find the 200 month EMA. Between the 72.00 level and the 77.13 level, any of the round number levels could act as resistance. Another possible scenario is a breakout-pullback pattern around the 72.00 level. On the other hand, if the price of WTI oil breaks below the 70.00 level, then is next support zone could be the 67.62 level along with the 55 day EMA, purple line.

Bullish breakout on the USD/JPY

On the daily chart of the USD/JPY we can see that the pair has been rallying from the 105.00 zone all the way to the 110.00 area. The bullish trend has been steady with a few consolidations here and there. Actually, once the price go to the 110.00 level, it consolidates there, oscillating around the 200 day EMA (blue line). The bullish pressure accumulates at the 110.00 level with the daily lows higher than the previous ones, forming what it appears to be an ascending triangle. The price of the USD/JPY finally breaks above the 110.00 level and if it continues rallying, then the 111.00 level may act as a resistance. Another possible scenario is the formation of a breakout-pullback pattern around the 110.00 level. To the downside, in case of a false breakout, the price may fall again to the congestion area around the 200 day EMA, with a support at the low of the 108.63 level.

The Euro could have exhausted its pullback

On the daily chart of the EURUSD we can see that the pair has been falling and keeps a very good downtrend that took the price very close to the 1.1800 level, from where it pulls back to the upside. During the pullback, the price of the EURUSD breaks above the 1.1900 level and comes very close to the 200 day EMA, blue line, around the 1.2034 level. Monday’s daily candle is in the shape of a shooting star, which is a bearish reversal pattern. Therefore, if the price keeps dropping below the 1.1900 level, then the pair may go back to its bearish trend in the short term. The 1.1800 level may act as a support for the EURUSD, especially when we can find the 76.4% Fibonacci retracement at that zone. The 55 day EMA is pointing down and its angle of inclination is showing us that the bearish trend is still in place. To the upside, the 200 day EMA may act as a resistance.

Bearish flag on the Pound

The flags, triangles and pennants usually act as continuation patterns and are formed around a consolidation zone. However, we must keep in mind that since the price of the asset consolidates in a congestion area, it may actually break in any direction. On the daily chart of the Pound versus the Dollar we can see that the price has formed a bearish flag around the 1.3500 level. The pattern is called bearish, not because it is going to break to the downside, but because the trend coming into the formation is bearish. None the less, we can see that the pressure is accumulating to the downside and we could see a breakdown of the 1.3500 level. In such case, the GBP/USD may accelerate its bearish momentum and fall to the 1.3200 level. On the other hand, if we see a bullish pullback, the pair may find some resistance at the 200 day EMA (blue line), which is just below the 1.3700 level. If the price manages to break above the 1.3700 level, then its next resistance would be the 55 day EMA along with the 1.3900 level.

Webinars: The Market Has A Memory

Another great event provided by ActivTrades is available to all of those who would like to expand their knowledge of the financial markets and become more profitable. The next webinar will be conducted by Martin Walker a market professional with lots of experience. Don’t miss out this great event on May 27^th at 7pm London time. Learning about the underlying forces that move the markets is very important to have a better outlook of future price movements. The market has a memory is the title of the Webinar and that is completely true. The price action usually repeats itself even on different time frames. For more information and to register for the event, please visit the following link:

https://www.activtrades.com/en/webinars