Four potential trade setups are on my list for this week as Oil, Gold, USDJPY, and USDCAD are testing key levels.
USDCAD on the Verge of Breakout
USDCAD is trading around the neckline for a head and shoulders top pattern. The head and shoulders formed after testing the major resistance level I mentioned earlier around 1.3850.
The 50-day SMA also resides around the neckline of the pattern. Hence, a breakout below the neckline at 1.3500 would indicate further downside toward the next support level at 1.3225 level.
The ideal target for the head and shoulders trade setup is near the 200-day simple moving average, around 1.3050.
USDJPY Retesting Key Area
Another support retest trade setup could be forming on the USDJPY.
We have seen USDJPY consolidate recently following the pre-intervention high at 151.95. Where every downside dip towards the previously broken resistance area around 145.90 was rejected.
Obviously, this support area is an area of interest. Hence, I would look to buy the pair if I see a bullish reversal candle around that area.
On the other hand, If we break below the bottom of that support area at 145.00, it is likely that we see a short-term trend reversal and an extension of the downside wave. Possible downside targets start at 143.57 next swing low.
WTI Oil Possible Bearish Resumption
Another interesting chart, longer term though. Crude Oil is retesting a confluence of the previously broken horizontal support-turned-resistance among the 93.00-93.50 area.
The 200-day simple moving average also resides around that area. While this happens following an earlier break of the rising trend line as shown on the chart.
I will be watching for a technical confirmation signal such as a reversal candle pattern on the daily chart to confirm a short trade setup.
Gold Consolidates Around Major Support
Gold has been moving sideways recently following a breakout below the support area shaded in red.
This could be a double-top pattern complete.
At this moment, the price is retesting a shorter-term falling trend line as well. Hence, this is a good time to look for short trades.
The next support area (possible initial target) is at 1575-1550.
I would love to see the 1730 level hold for the bearish scenario to remain valid.