Technical Chart and Candlestick Patterns: USDCAD has shown steep slumps (-0.16%) so far in this week.
Thereby, the previous upswings on bullish engulfing at 1.3372 now seem to have been totally exhausted, back to back shooting stars are traced out at 1.3377 and 1.3385 levels respectively (on 4H terms) that has plummeted prices below 21DMAs.
Most importantly, the bullish patterns on monthly terms, have developed an ascending channel pattern. The pair has tested channel support at 1.3112 levels in the major trend, consequently, the current price has spiked well above 21-EMAs. On the contrary, it has shown failure swings at wedge resistance at 1.3403 levels in the minor trend.
While both leading oscillators (RSI and Stochastic curves) show upward convergence to indicate the strength in the major uptrend and the intensified selling momentum in the minor trend.
Hence, the prevailing downtrend is most likely to prolong further up to wedge support (refer 4H chart).
Trade Tips: One intraday trading grounds, at spot reference: 1.3320 levels, we advocate executing tunnel spread options strategy with upper strikes at 1.3349 and lower strikes at 1.33 levels, the strategy is likely to fetch leveraged yields as long as the underlying price keeps sliding towards lower strikes on the expiration.
Alternatively, contemplating above technical rationale, we advocated initiating longs in USDCAD futures contracts of May’19 delivery for the major uptrend. We continue to uphold the same strategy by rolling over.
Currency Strength Index: FxWirePro's hourly CAD spot index is flashing at 104 (which is bullish), while the hourly USD spot index was at 64 (bullish) while articulating at 07:36 GMT.
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
