Monthly: We had an impulsive rally from the 2011 low (0.9407) to the 2016 high (of 1.4690). The correction lower found buyers close to the 50% pullback level of 1.2049. Mixed trading for the last 32 months looks to have formed a corrective channel. Price action in September offers a bearish Outside Month, often an indication that a temporary top is in place.
Weekly: Although the pair broke the trend of lower high (in June 2018), levels close to the 50% Fibonacci of 1.3375 (from 1.4690-1.2061) found sellers. Reverse trend line support continues to support price action with 17 weeks of mixed trading.
Daily: This (mixed trading) has resulted in an Expanding Wedge formation on the daily chart. Although this formation normally has a bias to break to the upside, the trend of lower highs (at 1.3123) continues to cap gain.
Intraday (4-hours) – Impulsive move to the downside after the BoC (Bank of Canada) hiked it policy rate by 25 bp yesterday. We look to have formed a bearish Ending Wedge pattern. A break of support at 1.2995 and the measured move target is 1.2785. With a 261.8% extension seen at 1.2968 (from 1.3132-1.3070) there is scope for a mild upside correction to get short.
