CAD, Aussie and Gold Weekly Overview - September 16 close

USDCAD

As expected, the Loonie retraced even further through our targets closing on Friday at 0.9789, and breaking down the daily ascending trendline. Price is back again inside the descending channel and a retest of the confluence of the weekly SMA34 and middle Bollinger bands as well as daily SMA200 is very near (0.9730/40) and round number 0.9700 is near the 50% correction. Price should bounce back up from here; however if those levels are broken, we would be aiming to revisit the lows at 0.9400, with daily intermediate targets at 0.9650 and 0.9550 (61.8% and 76.4% retracement levels respectively).

A bounce to the upside could be signaling the formation of a daily Head and Shoulders pattern with neckline at 0.9730, aiming again towards the weekly upper trend line of the descending channel and 23.6% level at 0.9830/80. Here the bearish projection would aim to fall another 290/300 pips to 0.9430/20 which coincides with the weekly bearish target at the lows.

A stronger bullish sentiment would break the channel and the first level to watch is the weekly SMA100, where we maintain our projections of last week analysis: area between 1.0125 and 1.0175 and on a longer term view, the projection of the previous flag pole to the weekly 138.2% extension (1.0238/40).

AUDUSD

The Aussie was strongly rejected from support level at 1.0180 and is now on its way to our targeted area between 1.0470 (weekly SMA34 and daily confluence of SMA200 and SMA34) and 1.0600 (weekly middle line of the Bollinger bands and daily SMA100) should that level give way to further upside towards the descending trend line. Despite the return of the bulls, a fall to parity is impending and we should exert much caution if trading on the long side, as this pair downtrends are sudden and strong.

I wouldn’t enter short positions yet though, and am awaiting for the price action to develop inside the above mentioned area (1.0470/1.0600). Conservatively, I might wait for some pullback to the 4-hour SMA34 and previously broken resistance at around 1.0340 and set my target to 1.0470, then wait for the reaction at that point (4-hour SMA200) to reassess the markets. We might have further upside to the 4-hour trendline and SMA100 and resistance zone between 1.0510 and 1.0530.

Gold breached the lower trendline of the rising wedge reaching near the 38.2% weekly Fibonacci retracement level last week and breaching 1800.00 as we had expected, reaching our target at 1760.00. Price was then rejected back upwards inside the channel, closing at the trendline a little above 1800.00.

Our next bullish target is the daily middle line of the Bollinger bands around 1840.00, and continuation to a retest of the highs at 1920.00, or some ranging action between 1800.00 and 1840.00. Next bullish targets medium-to-long term are the same, an extension to 1960.00/70.00 and finally to the psychological level 2000.00.