Canadian Dollar Nears Resistance

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The Canadian Dollar has been rising since it's March 19th low.  Since that time it has made four measured moves (MM).

The dominant MM had a neutral retracement with extreme 6:24 left-handed skewing.

The 2nd MM had deep retracement with 5:12 left-handed skewing.

The 3rd MM had deep retracement with 4:3 right-handed skewing.

The 4th MM had shallow retracement with 3:1 right-handed skewing.

These MM retracements and skewing can give us some insight on the strength of the up trend.  Strong trends have neutral or shallow retracements with right-handed skewing.  Weak trends have medium deep or worse retracements with left-handed skewing.  This up trend started with a neutral retracement, which is strong.  However, it had left-handed skewing with a 1:4 ratio.  This shows weak momentum.  The next two MM's had deep retracements, which signals a weakening up trend.  It's not surprising giving the skewing on the dominant MM.  Finally, the final MM showed some strength with a bullish retracement and bullish skewing.  This helped push the market higher on the 26th of May, creating the breakout candle of the dominant MM.  Now that we know how this market has rallied, we can determine possible resistance using Fib clusters of the four MM's.

The first major area of potential resistance I see is between 74875 and 76146.  This area contains the dominant MM's 261 extension, the 2nd MM's 261 extension, the 3rd MM's 361 extension, and the 4th MM's 461 extension.  In addition to these fib clusters, we have the 78.60 retracement level of the 12-31-19 high and the 3-19-20 low and the YTD POC level @ 7528.  Finally, we have a VSCORE approaching it's mean.  All these together should create significant upside resistance.  If prices reach this zone and stall out, then I would expect a correction back down to a least 72245.  This is the swing high of the dominant MM.  I will continue to monitor this market as it approaches my resistance zone and give more updates if warranted.

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Natural Gas Double Bottom?

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Natural Gas may be forming a double bottom pattern.  We need a close above 1.847 for confirmation.  Upside target would be around 2.081.  This market has been in a strong down trend since its 11-5-2019 high.  So what exactly supports this double bottom pattern?

First, large traders are holding long positions in the 4+ years extreme range.  Small traders have recently been selling their extreme long positions.  Both are bullish.

Second, prices found support inside my fib cluster zone near the 361 combo.

Third, there is bullish divergence on the RSI.

Fourth, a bullish engulfing pattern formed yesterday.

Fifth, there is a seasonal bias for a mid-February to late April rally.

Finally, the lows found support from levels seen during 1999 and 2016 bottoms.

Next, if prices can indeed rally, then how high can they go?

First upside resistance zone is between 1.925 and 1.994.  This area contains a falling window pattern, monthly R1, and the 50 DMA.  If we can breach this zone AND take out the 2.025 level, then we will take out another swing high.  This will reverse the bearish pattern of making lower highs and lower lows.  This would put our 2.081 target within reach.  Once met, then we could see prices make a run at the volume at price resistance zone between 2.246 and 2.318.

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Platinum (Update 3)

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Back on January 28th, I wrote about a possible top forming in Platinum.  My conclusion, which was "the chart is starting to support a bigger correction", proved to be true.  This market has made a deep pullback and is now approaching the 78% retracement of the 8-16-2018 low and the 1-16-2020 high at 819.70.  This level is inside a possible support zone between 846.40 and 803.00.  I would expect some sideways action inside this area before attempting a rally.  This market has already hit an upside resistance zone between 912.90 and 922.80.  One of these two areas will need to be taken out for this market to make it's next big move.

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Platinum (Update 2)

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Platinum has continued its sell-off since my January 28th post. The question now becomes how much lower can it go?

Watch the 945.60 to 921.70 range.  This area is a subsection of my proprietary Fib support zone.  I have narrowed this larger zone based on the 4 measured moves made on its 240M chart.  The primary and secondary ABCD patterns both have deep retracements, which signals a weak down trend.  The decreasing nature of the time ranges (16 to 23 to 9 to 7 to 7) signals momentum is starting to wane.  We typically see moves bottom out as these time ranges shrink.  The deepness of the two primary ABCD patterns also indicates we could see a healthy pop once a low is made.

Conclusion:
I anticipate a move lower into this support zone followed by some sideways action.  I would then expect a rally to test the recent highs.  Whether or not this re-test will fail or not is anyone's guess.

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Platinum (Update)

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Platinum prices stalled @ 1046.70 on January 16th, which was inside the middle of my proprietary Fib resistance zone.  Is this the start of a bigger correction or just a temporary pullback before making new highs?

  • Let's digest the chart for clues:
  • Jan 16th high made on selling (black candle), which is bearish.
  • Jan 16th high made near the monthly R2 pivot @ 1041.00, which can be an overbought level.
  • Jan 16th high corresponds with 3 major swing highs from 2017 and 2018.  All of them saw big sell-offs afterwards.
  • Price action has since fallen more than the previous 3 retracements off the Nov 12 swing low.  This breaks the symmetry of this up move signaling a bigger correction could be coming.
  • Large traders have record net long positions as of Jan 21st, which is bearish.
  • The MACD formed a bearish crossover yesterday.

Conclusion:
The chart is starting to support a bigger correction.

 

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