Figure 1: USD/CAD Daily Chart


Technical Analysis

USD/CAD had a slow start to the week, bouncing off the uptrend support line on Monday, and slowly moving along it Tuesday through to Thursday. Friday saw the pair rocket up 123 pips from open to close as we had bullish crossovers (Figure 1) on both the MACD and Stochastic after Thursday’s session. As you can see in Figure 1, bullish divergence on both the MACD and Stochastic has formed on the daily chart further backing up Friday’s move up. Friday also saw the release of many economic numbers from both the US and Canada further pushing the pair up due to poor Canadian numbers and overall strong numbers coming out from the US.

Figure 2: USD/CAD Weekly Chart

Looking at the weekly chart (Figure 2), USD/CAD continues to respect the channel support and resistance lines. We also have a bullish engulfing candlestick pattern after the week’s close, and the Stochastic seems to be forming a bullish crossover. The MACD still remains in bullish territory and if the market continues to move up, expect to see a bullish crossover on the MACD as well.

Forecast: Bullish Bias

The channel is clearly still valid as we have not broken below it yet, and since we are at the bottom of the channel, there is more room upside than down. The bullish divergence as seen on the daily chart on both the MACD and Stochastic both support Friday’s move up, and bullish crossover gives us more confirmation on its bullish momentum. Looking longer term on the weekly, the bullish engulfing candlestick, the MACD, and price still respecting the channel gives us a bullish bias on this pair.


Figure 3: XAU/USD Daily Chart


Technical Analysis

Gold has decisively penetrated multiple support levels over the past week including the 1300 support and the up trendline support, signaling an end to the months-long intermediate uptrend that has started back in November 2018. On the weekly chart, the shooting star candle from two weeks ago has been confirmed by the bearish engulfing that closed last week, which may be marking the beginning of a new intermediate downtrend. Similarly, on the monthly chart, February closed in a potential evening star, which further points to a potential bearish reversal in gold price.
A decisive close below 1293 will open up more room to the downside – short-term target 1285. However, RSI (3) on the daily chart shows the price is now near the oversold zone, which is something to watch out for. Also, it’s possible for a minor pull-back move following a trendline penetration to take place.

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