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USD/CAD to test 1.3750 in January

al_dcdemo Posted 29 Dec. as Analysis on USD/CAD, Target: 1.3625, Date: 1st of February, 12:00 GMT  in #Technical analysis #USD/CAD #Wedge #Daily Chart #Bullish Bias #Weekly Chart #Technical Tools #Net Short Positioning #Dovish Boc
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
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A sharp rally at the start of 2016 and an even more impressive reversal is followed by a wedge-like upward sloping consolidation formation. The for…
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al_dcdemo 16 Jan.

UPDATE 5: Major currency pairs opened with gaps. U.S. dollar generally opened higher, up 10 to 35 pips. The exception is the yen, which gapped about 10 pips higher, in a risk-off fashion. The outlier is the pound which opened 180 pips lower after the prospect of a hard Brexit came again to the fore over the weekend. It's a calendar-heavy week ahead, which features central bank meetings from the ECB and the BOC plus speeches from Carney, May and Yellen and other Fed officials. We'll see whether the U.S. dollar correction will continue or the bullish trend will reassert itself.

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al_dcdemo 21 Jan.

UPDATE 6: The U.S. dollar generally moved lower against the major currencies this week. The exceptions were the yen, which was sold on rising U.S. bond yields, and the Canadian dollar which went down on BOC Poloz's remark that a rate cut remains on the table. The best performer was the pound, which rallied after May's soothing rhetoric on what was previously viewed as a "hard" Brexit. Donald Trump officially became the 45th president of the United States on Friday. The first of his actions will be the market's focus in the week ahead.

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al_dcdemo 23 Jan.

UPDATE 7: Sentiment from the last week continues as U.S. dollar starts the week on the back foot. What started as a normal pullback appears to be morphing into a medium-term correction. Three rate hikes this year, as some Fed officials have been touting, seem a bit far-fetched. I'm thinking two at the most which may be closer to what majority of market participants expect. Losses against the yen and the pound are the most pronounced today but the dollar has started to claim back some ground it had lost during the Asian session.

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al_dcdemo 28 Jan.

UPDATE 8: It was a lacklustre week for the dollar but the corrective momentum appears to have run out of steam, particularly against the euro, the franc and the yen. Commodity currencies generally performed better but the Australian dollar is finding it diffucult to sustain gains above 0.75. The pound broke 100 DMA for the first time since the Brexit vote. Next week will be a big one with three central bank meetings (Fed, BOJ, BOE) and plenty of U.S. data, including Nonfarm Payrolls. Trump's actions will remain closely watched.

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al_dcdemo 30 Jan.

UPDATE 9: U.S. president Donald Trump issued an executive order on immigration late on Friday (early Saturday in Europe). The order led to some chaos in airports in the United States and overseas, and prompted protests and legal action. The dollar gapped lower at the open and continued to trade south in the first part of the Asian session. The impact was most visible in the risk sensitive yen while the antipodean dollars were barely moved due to Chinese Lunar New Year holidays. The pound rose about 60 pips but stalled ahead of the big figure at 1.26.

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Loonie to trade mostly sideways into year-end

al_dcdemo Posted 28 Nov. as Analysis on USD/CAD, Target: 1.3475, Date: 2nd of January, 12:00 GMT  in #Technical analysis #USD/CAD #Wedge #Daily Chart #Bullish Bias #Weekly Chart #Technical Tools #Net Short Positioning #Dovish Boc
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
A sharp rally at the start of 2016 and an even more impressive reversal was followed by a wedge-like upward sloping consolidation formation. The for…
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al_dcdemo 12 Dec.

UPDATE 5: Over the weekend, OPEC and non-OPEC countries reached a deal to cut oil production. On top of that, Saudi Arabia showed their commitment by declaring that they will cut more than what they agreed on last week. Oil prices opened sharply higher, WTI is currently up more than 5% on the day. Loonie gapped down at the open, extending the 450-pip fall since mid November. 2016 trendline near 1.31 is backed by 200 DMA. 1.3150 is the initial resistance.

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al_dcdemo 17 Dec.

UPDATE 6: The reaction after the Wednesday's FOMC decision was telling. The jump in bond yields and the surge in the dollar showed that the markets were priced for a more gradual tightening path than implied by the latest dot plot. Yellen's endorsement of the dot plot was another contributing factor. Even though it may seem that the dollar moved too far too fast, the rally looks very strong and I think we haven't seen the top yet. With this kind of momentum it is possible that the usual year-end thin holiday trading will mean more volatility rather than range-bound action.

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al_dcdemo 21 Dec.

UPDATE 7: Canadian dollar sold off strongly against the U.S. dollar after FOMC upgraded tightening path and Yellen used the word "gradual" only twice at the last week's press conference. Oil prices remain firm after OPEC and non-OPEC production cut deals. The pair sprang from the strong support zone (May - November trendline, 200 DMA, 2009 high) below 1.31 and almost completely retraced the decline from the first two weeks of the month in two days before stabilizing ahead of 1.3455 (Q3 2015 high). Looks bullish above 50 DMA.

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al_dcdemo 24 Dec.

UPDATE 8: Liquidity and volatility both fell ahead of the holidays. The U.S. dollar strengthened against the pound and commodity currencies, weakened against the yen, and remained unchanged against the euro and the franc. If the past week was of some example, the week ahead should be even more quiet. But I wouldn't bet on it because I think some of the recent moves have further to run and many will not be patient enough to wait for the New Year to get on board of them. Year-end position-squaring coupled with low liquidity will produce a couple of moves in any case.

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al_dcdemo 31 Dec.

UPDATE 9: Final week of the year was a pretty calm one if we exclude sharp spikes in euro and franc on Friday - already thin early Asian session liquidity was further diluted due to holidays and a large-sized order took out weaker hands. The dollar ended the week mostly lower, in part also due to bulls booking profit at year-end. Many countries are observing a holiday on January 2nd but I'm sure not everyone will wait until the 3rd to place their first trade. Market themes remain firmly in place and that could mean a volatile start to the new year.

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Loonie may extend towards 1.375 in the weeks ahead

al_dcdemo Posted 28 Oct. as Analysis on USD/CAD, Target: 1.3475, Date: 1st of December, 12:00 GMT  in #Technical analysis #USD/CAD #Wedge #Daily Chart #Bullish Bias #Weekly Chart #Technical Tools #Net Short Positioning #Dovish Boc
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
A sharp rally at the start of 2016 and an even more impressive reversal was followed by a wedge-like upward sloping consolidation formation. Up unti…
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al_dcdemo 17 Nov.

UPDATE 6: Loonie still trades on whips and whims of the oil market, although its correlation with that market is not at the level it was earlier this year. Oil price shock has probably been discounted while both markets are a bit tired of the endless production cut saga. The pair broke to the highest level since February on the U.S. election day. It briefly traded above 50.0% retracement of the year's decline before pulling back. Top of the seven-month wedge is the first stronger support with more at 50 DMA coming in from below.

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al_dcdemo 19 Nov.

UPDATE 7: In the second week after U.S. election, the U.S. dollar rose against all G10 major currencies bar the Canadian dollar, which tends to perform well on the crosses in the strong U.S. dollar environment. The yen was the weakest of the bunch with the antipodean dollars not very far behind. U.S. dollar index blasted through 100 and closed the week on thirteen-year highs. If current market assumptions (large fiscal stimulus, further tightening by the Fed) prove to be correct, this could well have been the start of the second leg of the multi-year U.S. dollar move.

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al_dcdemo 28 Nov.

UPDATE 8: U.S. dollar appreciated against most of the G10 major currencies in the three weeks after the U.S. election. An exception is the pound which has been completely disconnected from the U.S. dollar trade and remained range-bound. Australian and New Zealand dollars, supported by yield advantage and the former also by rising copper prices, started their corrections a bit earlier. Low-yielders, the euro, the franc and the yen, recouped some of the losses on Friday and earlier today, but the U.S. dollar bulls were quick to buy into the dips. Price action suggests a risk-on week ahead.

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al_dcdemo 29 Nov.

UPDATE 9: Oil production cut/freeze saga continues and the OPEC meeting tomorrow is very much in the spotlight. There've been headlines supporting both scenarios but the market has leaned on the side that there will be some kind of agreement reached. The Canadian dollar was one of the best performers yesterday as it closed about 90 pips (0.67%) higher against the U.S. dollar. 1.3375 - 1.3575 is the range in play. The lower extreme is reinforced by the eight-month wedge top and the upper extreme by the 50.0% retracement of the 2016 decline.

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al_dcdemo 1 Dec.

UPDATE 10: OPEC decided to cut oil production by 1.2 mbpd to 32.5 mbpd yesterday. That was slightly less than what oil bulls may have hoped for but the fact that the cartel even reached an agreement is bullish in itself. We'll see whether non-OPEC will follow suit and whether the new quotas will be respected. The impact on the Canadian dollar was not as large as on the black gold. All in all, I'm pleased with the prediction which was fairly on target and also anticipated the expected price path quite accurately.

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Loonie to remain supported above 1.30

al_dcdemo Posted 28 Sep. as Analysis on USD/CAD, Target: 1.3125, Date: 1st of November, 12:00 GMT  in #Technical analysis #USD/CAD #Daily Chart #Bullish Bias #Weekly Chart #Technical Tools #Blow Off Top #Net Long Positioning #Dovish Boc
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
Loonie started the year with a sharp rally and topped out near 76.4% retracement of the 2002 - 2007 downtrend. The reversal was even more impressive…
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al_dcdemo 13 Oct.

UPDATE 5: Minutes of the FOMC meeting that took place in September showed nothing that we haven't already known. Perhaps the most important takeaway is that the federal funds rate is going up, barring an economic shock. The committee members more or less agree on the need to raise the rate, it is the timing that is still being considered. The U.S. dollar broadly strengthened after the release but there's some profit taking noted today. A part of the reason may well be much weaker than expected  Chinese export data that could be taken as a sign of slowing global growth.

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al_dcdemo 14 Oct.

UPDATE 6: U.S. dollar mostly extended its fourth quarter gains against G7 major currencies this week. The exceptions were the Canadian and the Australian dollars while the New Zealand dollar was pulled down by expectations of further easing by the RBNZ. Worries about global growth after much weaker than expected Chinese export data were diluted today by the first positive PPI figure in five years from the #2 economy which could be a sign of better times ahead. The gradual tightening from the Fed that we're seeing should keep risk assets supported.

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al_dcdemo 21 Oct.

UPDATE 7: Major currencies finished the week mixed against the U.S. dollar. The euro moved lower after Draghi dispelled speculation of an early tapering of the ECB QE programme. The franc followed suit. The yen ended the week in the middle of its two-week range. The pound closed marginally higher on short covering. The Canadian dollar tested 1.30 on pretty hawkish statement only to reverse sharply on Poloz's revelation that they considered a rate cut. The Australian and New Zealand dollars remain supported by carry traders, though the former sold off after weak labour force data.

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al_dcdemo 28 Oct.

UPDATE 8: Advance version of the U.S. GDP for the third quarter came in at 2.9% (vs. 2.5% expected and 1.4% previous). The dollar jumped after the release but the gains were quickly reversed. Selling has just been intensified after the news came out that FBI reopened Hillary Clinton investigation. European currencies and the yen are benefiting the most but those are also the currencies that fell the most in the past couple of weeks. Looks more like a position squaring ahead of the next week which will feature BOJ, Fed and BOE meetings.

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al_dcdemo 31 Oct.

UPDATE 9: Sharp moves on Friday afternoon were followed by a relatively calm opening on Monday. Currencies have been mostly unwinding those moves in the first twelve hours of trading. U.S. dollar rose against most of the major currencies with Canadian and Australian dollars two notable exceptions. Holidays in some countries over the next few days shouldn't have a great deal of influence on already low participation that we've been witnessing lately. If past summer is of any guide, otherwise "slow" months can be quite volatile if there's enough substance to drive price moves.

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