Forex Flash: Short-term patterns in USD/CAD suggest some scope for a minor rebound – TD Securities

FXstreet.com (Barcelona) -The USD/CAD finished the day with sharp losses, down 50 pips to close at 1.0113. The pair is now down 140 pips in just the last three sessions as commodity currencies continue to benefit from the “risk on” theme present in other asset classes.

According to Shaun Osborne, Chief FX Strategist at TD Securities, “Focus on the very short-term patterns in USD/CAD suggest some scope for a minor rebound in the market. The hourly chart shows a couple of positive short-term developments—1) the narrowing, descending wedge pattern over the past 24 hours suggests waning downside momentum while 2) the early USD buying in our session may have stabilized and reversed the short-term trend down via the formation of a bullish outside hourly range. There is scope for push higher over the balance of the session to the upper 1.01 area.”

Furthermore he added, “Sticking with the short-term theme, we think there is also evidence on the 6-hour chart that the market may be trying to base now. The drop under the 1.0290 double top trigger at 1.0234 last week targeted a measured move drop to 1.0177, we noted last week. But the market has overshot the downside target, reaching the 1.0140 area. As 1.0142 is 161.8% of the measured move potential, we rather look for the market to steady near-term and perhaps push higher to the upper 1.01 zone in the next day or so.”