Currencies – USD/CAD, Bearish, Daily
The final week of January 2020 finished with a significant down-day for the USD, as a result of the combination of the UK’s Brexit being completed which boosted the GBP and the EUR. Also, fears of the new Coronavirus (named after the crown-like shapes of the cousin of the SARS virus) have added international travel concerns. Finally, tensions around the US President Trump’s political machinations have certainly not helped the US economy, which added a very bearish close to the stock markets and indices.
The USD/CAD monthly and weekly timeframes show a sluggishly, mostly sideways consolidation, with the next key support level below current price at 0.7500
The weaker USD has caused price to trend downwards with lower-highs and lower-lows.
Having broken through support at 0.7600, price could be free now to head lower without much interference. Price could likely retrace back up into either the 8 & 20 moving averages, or the 0.7600 level to test it before resuming the downward trajectory potentially all the way down to 0.7500.
Ideally, price could form a small, or small-medium-sized candle in either area, and offer an entry when the subsequent candle breaks below the low of this candle, and which would then also gain potential additional stop-loss protection from the 0.7600 level, or the 0.7640 level above.
Should price move towards 0.7500, profits could be taken en route, and/or just above the 0.7500 level, in case price finds strong support at that level and retraces back on itself sharply.
Soft Commodities- Coffee, Bearish, Daily
Coffee has been moving lower in an aggressive fashion, hardly slowing to do a deeper retracement to test recent levels or moving average equilibrium zones.
The Daily chart displays a smooth, orderly downtrend, with lower-lows and lower-highs, and price recently broke below historical support and resistance around the 106.00 area.
The next most notable level is around 95.00, after a soft level at 100.00, where price is currently.
Here, price could retrace upwards temporarily, test the 106.00 area for resistance and then resume the current downtrend.
Should price form a small, or small-medium bearish candlestick there within the next few days, there could be an entry opportunity below the low of this candle, should price subsequently break lower.
The level and area of 106.00 and above could offer potential additional stop-loss protection if price cannot break up through resistance.
An aggressive profit-taking approach should price move towards this level could help to mitigate risk and protect possible profits.