This key pattern has generated over 500 pips in profit since the pattern formation. Now, again this currency pair has formed a key pattern. In the weekend review 21-23 March we discussed a key pattern formation on the longer term weekly chart which suggested that the weekly cycles for this currency pair had topped. Also on the shorter term daily chart, a bearish Butterfly pattern formation took place, which provided a very low risk shorting opportunity. For the next 3 and a half months, this currency pair i.e. USDCAD kept on going down well over 500 points since these patterns were discussed with a pin point accuracy. Please review the link here to see the power of the patterns.
Now again, a low risk opportunity presents itself. The price has formed a bullish Gartley pattern indicated on the attached Daily and Weekly charts with the shaded regions. It appears that the cycles for the USDCAD have reversed to the long side. On a daily basis a close above 1.0730, which is the 38.2% Fibonacci retracement level shown on the chart, would be a further confirmation signal. A close above the 61.8% Fibonacci retracement level which is at the 1.0830 level would indicate that the upward trend resumption had gained momentum with the next level of resistance appearing around the 1.0950 and then 1.01050 levels. Surpassing this, the pair is likely to eye the highs of 1.1300 reached. Disappointing jobs figures from last Friday propagated this upward thrust, cycles suggest further disappointing fundamental data. On the weekly chart a bullish engulfing candlestick pattern as presented itself. On the other hand, a close below the 61.8% Fibonacci retracement level on the daily chart around the 1.0595 level would indicate that the pattern has failed and the price could move lower to the next Fibonacci level, the 78.6% retracement around the 1.0450 level.
Key data for the USDCAD for next week:
16 July – manufacturing sales m/m,
– BOC monetary policy report, BOC Rate statement
18 July – Core CPI m/m, wholesale sales m/m, CPI m/m
USDCAD Daily chart displaying the bullish Gartley pattern
Longer term weekly chart, presenting a bullish engulfing candlestick pattern and the Gartley pattern in the shaded area.