Price is losing momentum and coiling up within a potential wedge formation above ther March ’14 high
The wedge I have outlined above is there to merely show how momentum is waning as it drifts lower to the March ’14 high. It can (and probably will) see some volatile spikes outwith the trendlines, so I am putting more emphasis on the S/R levels to aid with trade entry and exit.
Whilst we remain between 1.866 and 1.89 I am considering a bullish range trade between these key levels. Due to the corrective nature of the decline and the rebound from 1.866 then a buy-limit could be considered to enter long on a retracement towards 1.866 support with a TP just below 1.89.
Looking further ahead a break above 1.89 could be taken as confirmation of a Bullish Wedge and further bullish setups could be considered on lower timefreames.
As for potential catalysts the UK may have more to offer. Domestically quiet for Canada, (although Poloz does speak on Thursday) UK CPI data tomorrow could provide some movement as it is expected to print a record low of 0.1%. Whilst the inflationary trend remains clearly bearish with an expectation for temporary deflation over the coming months then it does leave an upside surprise if inflation its 0.2% or higher.