Chart of the day: Canada’s hammer candle
The Canadian dollar has made stellar gains against its US counterpart since early May’s shooting star weekly candle (just under Fibonacci retracement resistance). A 10 per cent gain in 12 weeks in a major currency pair is not to be sniffed at, yet last week’s hammer candle is a warning sign that perhaps things have moved a little too far – and too fast. Interestingly it is at the C$1.2400 level, which has contained the low points of this exchange rate for the last two years. Therefore allow for some correction and consolidation in August within the context of an established medium-term trend to US dollar weakness. Rallies towards C$1.3000 are seen as selling opportunities.
Nicole Elliott is a technical analyst