FxWirePro: USD/CAD uptrend on verge of handle formation but short-term bulls drift in narrow range as buying momentum shrinks away

The US dollar bulls seem to have taken a halt in the tight range between 1.3588 and 1.3378 against CAD, the bulls’ momentum shrinking away in tight range, after last week’s long legged doji formation at 1.3496 levels, this week again the formation of long legged doji is the most likely (see weekly plotting).

While CAD bulls gaining traction in this tight range on account of OPEC’s meeting that is scheduled on this 30th (see both daily and monthly plotting).

Although the current prices are consistently spiking well above DMAs testing upper range as the stiff resistance at 1.3588 to go in the narrow range.

For now, the breach above exposes more upside potential due to more bullish momentum offered by leading oscillators on monthly terms.

On a broader perspective, as you can probably make out from monthly plotting, ever since the pair has taken supports at 1.3070 levels, bulls in major trend resumed and since then prices spiking higher again above 7EMA to resemble a handle pattern in conjunction with the saucer pattern earlier.

Both leading oscillators signal buying interests on this timeframe, as RSI (14) evidences a bullish convergence with the rising prices above 62 levels after testing support at 52 levels multiple times in the past, so we believe there has been buying sentiments atleast in the medium run.

While stochastic has been quite decisive on both weekly and monthly terms to signal momentum in this buying sentiment but slightly bullish bias over medium terms.

To substantiate this bullish stance, MACD’s bullish crossover above zero levels signals uptrend to prolong further.

If the intermediate bulls manage to break above upper range (i.e 1.3588), then the rallies continue to persist, as a result, handle pattern is possible in coming months. Hence, to participate in this bull run we encourage option spreads like patterns to keep our FX portfolio safeguarded regardless of swings. We come up with such strategy in our upcoming write-ups.