Matt Simpson, CFTe, MSTA
CityIndex
Clues were provided at 1.0810 support which fails to break to the downside after 3 attempts. Additionally CAD failed to capitalise stronger 2Q GDP, a narrowed Trade Deficit and record Building Permits. At current levels weekly charts appear to be confirming a bull flag.
Whilst the potential bull flag is messy (although when are they ever not messy) the broader pattern does favour a continuation pattern at this stage looking at how the 1.081 support held. That said, if we do fail to see the bullish continuation unfold then we risk sideways trading where we would then move across to the bullish trendline. Overall the bias remains bullish above the trendlines.
Intraday price action may provide an opportunity to hop on board before the next bout of buying. The break above 1.094 confirmed a double bottom (with spikes rejecting 1.081 support) and projects and approximate target around 1.105. At time of writing we are drifting towards 1.094 support where I will be seeking bullish setups.
I expect 1.105 to hold initially as there are several technical levels but once this is cleared we should be en route to 1.115.
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