Commodity Currency Technicals:
With a lot going on in the Vantage FX office this morning, just a quick note featuring a few charts and carries on from the commodities trading theme we’ve been following recently in the Forex News Centre.
With Oil filling the Doha disappointment gap (but pausing at swing highs which we’ll talk more about on the @VantageFX Twitter account today), I wanted to take a look at some of the commodity currencies, most notably the Canadian Dollar.
Each of these daily charts are the same, just the first is scrolled back on MT4 to highlight where the trend line highlighted is drawn from.
You can argue how you like about where to connect your points to start the trend line, but my rule is usually ‘the first two most obvious points’.
Now back in real time, we see the bearish trend line was broken as Oil and the CAD ramped up in Doha anticipation. Price did creep back, but was rejected on an almost perfect daily retest of previous support this time as resistance. I had that little red line left on my chart from the USD/CAD scenario that we’d previously managed risk around here, just adding to the interest seen in that area.
The top line of the bullish channel is just a parallel of that obvious, bottom trend line. After Kiwi cleaned out stops above the 0.6886 swing high resistance level, price pulled back before kicking higher again to test resistance once more.
I haven’t marked it on this chart, but take a look back to June 2015 and the gap down. Will channel resistance hold once again in this longer term bearish trend, or will the magnetic allure of a gap fill be too strong?
On the Forex Calendar Wednesday:
GBP Average Earnings Index 3m/y
GBP Claimant Count Change
EUR ECB President Draghi Speaks
USD Crude Oil Inventories
Dane Williams – @VantageFX
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