[Weekly Recap|18/16] SP500, USDCAD Failing at Support, GBPCAD Outlook

This GBPCAD example is the continuation of the How to trade using Fractals video. The indicated divergence and combination of minor and major corrections in between lead to a sharp drop in this market. Two fractal breakouts got you short, now the downmove seems to come to an end, during week 18 of this trading year GBPCAD closes above the trend ending moving average, making trendfollowers pull their stop tight.

Even though overall (monthly timeframe) this market is in a correction, the type of correction was smooth enough to yield the shown downtrend making some profits.


The SP500 daily chart shows the current uptrend of the US Indices. The last three weeks have been significantly slower, but that is merely due to internal corrections taking place. On the daily you see the price trading right inside of the marked support zone, Friday closed higher, but wasn’t able to really come out of this important price level. Most likely we’ll see a major type of correction occurring (Momentum Oscillator goes below 0) and then a resumption of the previous uptrend should unfold. On the Dow Jones this would mean new All Time Highs, on the SP500 the same could be true. European Indices are moving quite differently to the US Indices, a fractal has been broken there too, but let’s see if those stock indexes are really able to deliver stable trends for the rest of 2016. As I said before, the danger of a huge correction taking place, sending price up and down thousands of points without any decent breakout entry opportunities, still remains.

SP500 Daily


The USDCAD FX pair has been in focus for a while, too. I mentioned the important support level this market was approaching during its weekly correction. Even though this level was exceeded quite a bit to the downside, making the impression that a new trend (weekly) could develop, the last trading week proved market behavior to be otherwise. Price jumped back up exactly to the level of support, which is now resistance, at around 1.2850. Expect slower moves here as this pair is in the middle of the balance zone trying to figure out where it should go next. The overall price direction to the upside should be resumed over the longer-term. Until then we’ll wait to see what the current correction phase has to offer.



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