USDCAD
Let’s start today’s analysis with USDCAD. The pair bounced off the key support at 1.3870 and the upward move was launched afterwards. Gains accelerated once the pair broke above downward trendline. Nevertheless, buyers struggled over the last few days and the pair delivered a local downward correction. Should it deepen further, the 1.40 handle should be the first support to watch. However, breaking below it could trigger a deeper decline, with 1.3870 being possible target. On the other hand, should the upward sentiment prevail this week, the resistance at 1.4260 could be at risk. This level is marked with the upper limit of Overbalance structure and previous highs from 21st April.
USDCAD H4 interval. Source: xStation5
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European stock markets rallied at the end of the previous week. However, the German index (DE30) launched a week with a bearish gap. The recent upward swing was halted near the big price gap from 9th March. The rebound from this level could suggest a return to the main trend, which remains downward. Nevertheless, looking at H4 interval, one can see that the market is trading in a local upward move.The ongoing downward move can be seen as just a correction within a large upward impulse started on March 19 .A return below the psychological 10,000 handle would be a big bearish signal. Earlier, the 10,330 pts area may act as an important support.
DE30 H4 interval. Source: xStation5
US500
Finally, let’s take a look at the S&P500 index (US500). Looking at the daily time frame, one can see that the index is trading in upward correction within a downtrend. Recent upward move stopped slightly above the 2,900 pts, but the resistance area has not been broken yet (zone marked with purple color). The aforementioned area is marked with equality of A and C waves from the Elliott Wave Theory, previous price reactions and 61.8% Fibonacci retracement of the recent downward move. According to the classic technical analysis, as long as the price sits below 2,900 pts handle, the downward move looks to be the base case scenario. Nevertheless, pace of declines is not big therefore one cannot rule out a possibility of another attack on the resistance at 2,900 pts. In case of a break above it, a bigger upward move may follow with 78.6% Fibo level being a potential target (3,125 pts).
US500 D1 interval. Source: xStation5
