USDCAD

The Loonie failed to break the daily SMA100 resistance at 0.9975 and headed down to retest the upper line of the recently broken weekly descending channel, also coinciding with our first bearish target alternative at the daily SMA34 (0.9820/00). Price ended on a daily pin bar/doji candle above that moving average, and will have to be confirmed before we can expect more upside. First bullish target would be at the previous swing high weekly top (1.0050/60) which also coincides with its SMA34, but on a shorter term view we first have to break the strong daily resistance level and reach above parity to really think of a reversal of the actual bearish trend. In the case the above scenario fails again, I would maintain previous week’s expectations for a retest of the previous lows in the 0.9660/0.9750 consolidation area.

AUDUSD

It is not a surprise to see the Aussie back again to above parity, given it’s steady carry attractive and growing Australian economy in comparison to the other currencies. Last week the price was strongly rejected from below the SMA34 level (0.9700) and closed on Friday well above (about 100 pips) our projected base price of 0.9860 for a reconsideration of the momentary trend. It has already gained about 70 pips and seems aimed to retest the higher levels, although we should proceed with caution given the overall long-winded top range on the weekly. Price is presently attempting to break the SMA200 on the 3-hour chart and trading inside an ascending channel which upper line passes at the level of the SMA200 of the 4-hour chart (1.0066). This is also the third trendline staircase level (the first one was at 0.9808 and the second 0.9950) delimited by a middle line passing between the second and the fourth previous bearish trend lines. Along all the years I have been trading this pair, I have noticed that when price seems to advance little by little without too much apparent force, it is precisely when it is focused on a steady continuation of the trend. Based on the 4-hour chart overview, next target would then be the fourth trendline staircase level at about the middle line between the second and the fourth previous bearish trendlines, around 1.0120/25.

Price is showing some exhaustion at the moment and the hourly chart is forming a rising wedge, which could give way to some correction and retest of the broken parity level and 0.9980/1.0000 support area before resuming the uptrend towards 1.0200 and possibly beyond (projection of the head of an inverted head and shoulders, about 250 pips from 0.9950).

(See also: my previous article “Australian Dollar Outlook before London open”)

Bearish and Bullish views from last week (4-hour charts)

XAUUSD (GOLD)

Gold reached lower to the middle line of the weekly Bollinger bands and 38% Fibonacci retracement at 1375.00, ending the week on a long-legged doji / pin bar to be confirmed this week for a resumption of the uptrend. The last half of the week was bullish and price retraced to the 61.8% level on daily, closing just above the middle line of the bands. I would expect a further bullish run towards the previous highs at 1440.00/50.00 as a first target, and an extension to the 127%/138.2% levels from the swing high, at around 1470.00/1485.00. Will this be the 1500.00 mark week at last? If so, expect a strong reaction to the downside afterwards, for another test of support at around 1430.00.

Should price fail to break the highs, a fall back to the 50% level (1375.00) and further to the weekly SMA34 and 61.8% level (1350.00/60.00) could be expected. Those are also (roughly) the daily 127% and 138.2% Fibonacci extensions on the whole swing low range.