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Cable may challenge the downtrend in the weeks ahead

al_dcdemo Posted 21 Feb. as Analysis on GBP/USD, Target: 1.2625, Date: 3rd of April, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Weekly Chart #Technical Tools #Strong Demand #Net Short Positioning #Brexit Vote #Neutral Boe
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
The declining wedge that Cable carved out during the past three years was pierced on both sides in one of the most volatile weeks in the pair's hist…
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al_dcdemo 11 Mar.

UPDATE 6: U.S. dollar extended its gains this week in most major currency pairs as a rate hike by Fed and a potentially steeper tightening path is getting discounted. One exception was the euro which gained on the back of constructive tones from ECB and less chances of Le Pen victory in French election. Next week's calendar features three central bank meetings (Fed, BOE, SNB), U.S. inflation, Australian jobs and New Zealand GDP. If FOMC fails to hike on Wednesday, the dollar would sell-off hard. To avoid disturbance, a hike is almost a certainty. "Sell the fact" reaction possible.

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al_dcdemo 18 Mar.

UPDATE 7: As widely expected, FOMC hiked federal funds rate corridor by 0.25%. It was a "dovish hike", accompanied by caution on the part of the committee and the governor Janet Yellen. Despite that, the tightening cycle will continue at a gradual pace and market currently expects two more hikes this year. U.S. dollar sold off in response but I don't think the weakness will last. Lower-yielding currencies in particular seem vulnerable as the U.S. dollar bulls will inevitable return. However, the period of exceptionally low global interest rates may be drawing to an end.

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al_dcdemo 25 Mar.

UPDATE 8: The dollar recorded another mixed week. Its losses were the most pronounced against lower-yielding currencies while it ended up higher against the commodity block. In other markets, oil fell as gold rose which may be indicative of traders adjusting for a somewhat weaker recovery and a shallower tightening path. U.S. Administration pulled back from its attempt to repeal Obamacare on Friday and said they will instead focus on tax reform. That adds some uncertainty and, likely, volatility to the quarter-end flow driven week ahead.

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al_dcdemo 28 Mar.

UPDATE 9: Major currencies started the week on a firm footing, particularly against the U.S. dollar. The reserve currency fell in response to Obamacare vote failure which means that the Administration will have more difficulties implementing its reforms. Euro trade above 200 DMA yesterday for a couple of hours before pulling back. Yen tested 110 around the same time but it too recovered to be back above 110.5. Pound rose to the highest (1.2615) since early February. More short-covering is expected as Article 50 gets triggered tomorrow. Commodity currencies look heavy.

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al_dcdemo 2 Apr.

UPDATE 10: The correction in the dollar that gained pace after the dovish hike by Fed appears to have stalled, despite signs that U.S. Administration will have tough time enacting some of its promised reforms. U.S. dollar rose the most against euro and franc but recorded only modest gains compared to yen and antipodean dollars. Pound and Canadian dollar were holding its own, both finishing a tad higher. In the week ahead, FOMC Meeting Minutes may reveal some detail behind the March's decision. Most Fed officials have continued to be hawkish though.

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Cable to remain well bid in February

al_dcdemo Posted 25 Jan. as Analysis on GBP/USD, Target: 1.2625, Date: 1st of March, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Weekly Chart #Technical Tools #Strong Demand #Net Short Positioning #Brexit Vote #Neutral Boe
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
The declining wedge that the Cable carved out during the past three years was pierced on both sides in one of the most volatile weeks in the pair's…
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al_dcdemo 11 Feb.

UPDATE 6: U.S dollar rose against most of the major currencies last week. It snapped the multi-week decline against euro, franc and New Zealand dollar. Gains were more modest against yen, Canadian dollar and pound. Australian dollar was the only major currency to record a narrow win. Unless Trump starts pushing in the direction of a weak dollar policy, and perhaps even, the dollar should strengthen against low-yielders over the medium term. That said, it will be difficult to meet many market participants' expectations of at least two rate hikes by the Fed this year.

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al_dcdemo 17 Feb.

UPDATE 7: Cable is still pretty much disconnected from the U.S. dollar trade as it consolidates near 1.25. Lower highs and higher lows are evident and the breakout, to either direction, will be the stronger the more time will elapse by then. Depending on how you draw the trendlines, the support comes in near 1.24 and the resistance near 1.2525. I'd say a break to the upside is more likely but 1.26 or 1.265 could prove to be a near-term cap. In any case, 1.25 continues to serve as a good bull/bear line in sand.

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al_dcdemo 18 Feb.

UPDATE 8: It was another week of relatively tight ranges. With exceptions of yen and maybe pound, major currencies ended the week pretty much where they started. There's still a lot of uncertainty regarding tax cuts and fiscal stimulus in the U.S. but inflation is rising and Fed rate hikes are on the way. One thing that keeps bulls cautious is the Administration's remarks about too strong a dollar and Trump's comments regarding a "level playing field for currencies". The other one is simply expectations of reflation with flows into riskier assets and currencies.

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al_dcdemo 25 Feb.

UPDATE 9: Indecision in markets continues. Major currencies mostly closed in the middle of their tight ranges. A mild risk-off has been notable with the yen buying gaining traction, in part due to French election hedging. Speculators are building longs in commodity currencies and covering shorts in low-yielders bar the euro. The main event in the week ahead is U.S. president Trump's speech to Congress, in which he is expected to announce his "phenomenal tax plan". Failure to meet market's expectations could see the dollar sell-off hard.

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al_dcdemo 28 Feb.

UPDATE 10: Major currencies opened the week on a similar note that they ended the last one. The U.S. dollar started on the back foot but stormed back later in the day. Month-end flows and some position-squaring ahead of the important Trump speech tomorrow could be in part responsible for this. Euro, yen, cable and Canadian dollar have seen the most activity while franc and antipodean dollars have traded in tighter ranges. GBP/USD staged a fake upside break and then a fake downside break of the triangle on D1. The pattern may resolve to the downside.

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Cable to stay in the current range

al_dcdemo Posted 28 Sep. as Analysis on GBP/USD, Target: 1.3225, Date: 1st of November, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Weekly Chart #Technical Tools #Strong Demand #Declining Wedge #Net Short Positioning #Brexit
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
The declining wedge that the Cable has been carving out during the past two years has been pierced on both sides in one of the most volatile weeks i…
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al_dcdemo 13 Oct.

UPDATE 6: Minutes of the FOMC meeting that took place on September 21th 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. 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 7: The 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. A gradual tightening from the Fed that we're seeing should keep risk assets supported.

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al_dcdemo 21 Oct.

UPDATE 8: 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 9: 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 the FBI reopened Hillary Clinton investigation. European currencies and 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 10: 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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USD/CAD may have enough fuel for a new high

al_dcdemo Posted 21 Nov. as Analysis on USD/CAD, Target: 1.3375, Date: 1st of January, 12:00 GMT  in #Technical analysis #Oil #USD/CAD #Confluence #Range #Uptrend #Momentum #Pullback #Strong Demand #Second Wave
Monthly chart
The pair is in uptrend since 2011. It broke above 38.2% retracement (of the 2002 to 2007 decline) in January and then traded around 50.0% retracement for nearly three months. In April, the pair pulled back deep enough to clear stops below 1.20. The confluence of the broken trendline (drawn off 2003, 2004 and 2009 highs) and 38.2% retracement wasn't even properly retested before the pair resumed the uptrend.
Weekly chart
During the pullback in late April and early May, lower tails …
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al_dcdemo 26 Nov.

UPDATE 3: Loonie surged through 1.34 on Monday and traded up to 1.3435. High for the year, set in late September at 1.3457, held. The oil rebounded on Friday and has not posted a losing day since. If the commodity stays supported, the pair is unlikely to break to new highs. In that case, a retest of 50 and 100 DMA (1.3150 - 1.3200) seems the most likely scenario. Otherwise, 1.34 level will need to be convincingly broken to make a push through the cycle-high feasible.

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al_dcdemo 27 Nov.

UPDATE 4: Canadian dollar lost about a quarter of a cent against the U.S. dollar and closed in the middle of the range. The pair's range was somewhat larger this week than in the previous one but overall price action was pretty much the same. Needless to say, the pair tracked oil prices which rose in the first three days of the week only to then give back most of the gains in the last two days.

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al_dcdemo 29 Nov.

UPDATE 5: Week ahead is big for Canadian currency too. GDP release will be followed by BOC meeting and labour market report. On top of that, U.S. will publish ISM Manufacturing PMI, ISM Non-Manufacturing PMI and NFP report. Attempt to break to new eleven-year highs early in the past week failed and the pair pulled back but based ahead of 1.3275. Higher lows during the best part of the month highlight the bullish bias.

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al_dcdemo 7 Dec.

UPDATE 6: Loonie finally broke through strong resistance band between 1.3450 and 1.3500, which includes September high (~1.3460), 61.8% retracement of the 2002 to 2007 decline (~1.3470) and the big figure. The breakout accompanied the sell-off in oil, which has put the commodity to new six-year lows. 1.3530 and 1.3680 are the two minor chart levels from June 2004 before 1.3820 (June 2004 high) and 1.4000 (May 2004 high). Depending on action in oil, 1.3375 - 1.3450 seems like a good support zone.

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al_dcdemo 17 Dec.

UPDATE 7: After months of preparations, FOMC finally decided to hike federal funds rate. The rate was at the record low of 0 - 0.25% for the past seven years (since December 2008). Last time that the rate was hiked was nearly ten years ago (in June 2006). New band for the rate is 0.25% - 0.50%. A couple of hours before the decision, much weaker than expected crude oil inventories report sent the Loonie to new eleven-year high (~1.3850), above the June 2004 high (~1.3820). The decision led to several whipsaws but the pair ended right where it started. The pair remains supported ahead of 1.3775.

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USD/CAD pullback to continue

al_dcdemo Posted 31 Oct. as Analysis on USD/CAD, Target: 1.2925, Date: 1st of December, 12:00 GMT  in #Technical analysis #Oil #USD/CAD #Reversal #Confluence #Uptrend #200 Day Sma #Strong Demand #Weak Fundamentals #Second Wave
Monthly chart
The pair is in uptrend since 2011. It broke above 38.2% retracement (of the 2002 to 2007 decline) in January and then traded around 50.0% retracement for nearly three months. In April, the pair pulled back deep enough to clear stops below 1.20. The confluence of the broken trendline (drawn off 2003, 2004 and 2009 highs) and 38.2% retracement wasn't even properly retested before the pair resumed the uptrend.
Weekly chart
During the pullback in late April and early May, lower tails o…
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al_dcdemo 22 Nov.

UPDATE 4: Canadian dollar was among those major currencies that lost against the U.S. dollar in the past week. It lost half a cent while the weekly range was about a cent and a quarter wide. Needless to say, price action in the pair was mostly range bound. Volatility in the pair is contracting what may also be a sign that we are nearing usually less active December.

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al_dcdemo 23 Nov.

UPDATE 5: There's nothing particularly of note on the calendar for the week ahead from Canada. U.S., however, will report several market moving data points: Prelim GDP, CB Consumer Confidence and (Core Durable) Goods Orders. Technically, the pair seems to be slowing while moving up towards cycle-high set in September. Although that may warn of a near term correction, quick fake break above the high is not excluded.

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al_dcdemo 26 Nov.

UPDATE 6: Loonie surged through 1.34 on Monday and traded up to 1.3435. High for the year, set in late September at 1.3457, held. The oil rebounded on Friday and has not posted a losing day since. If the commodity stays supported, the pair is unlikely to break to new highs. In that case, a retest of 50 and 100 DMA (1.3150 - 1.3200) seems the most likely scenario. Otherwise, 1.34 level will need to be convincingly broken to make a push through the cycle-high feasible.

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al_dcdemo 27 Nov.

UPDATE 7: Canadian dollar lost about a quarter of a cent against the U.S. dollar and closed in the middle of the range. The pair's range was somewhat larger this week than in the previous one but overall price action was pretty much the same. Needless to say, the pair tracked oil prices which rose in the first three days of the week only to then give back most of the gains in the last two days.

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al_dcdemo 29 Nov.

UPDATE 8: Week ahead is big for Canadian currency too. GDP release will be followed by BOC meeting and labour market report. On top of that, U.S. will publish ISM Manufacturing PMI, ISM Non-Manufacturing PMI and NFP report. Attempt to break to new eleven-year highs early in the past week failed and the pair pulled back but based ahead of 1.3275. Higher lows during the best part of the month highlight the bullish bias.

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USD/CHF rally is gaining strength

al_dcdemo Posted 31 Oct. as Analysis on USD/CHF, Target: 0.9975, Date: 1st of December, 12:00 GMT  in #Technical analysis #Confluence #USD/CHF #Symmetrical Triangle #Parity #Bullish Picture #Turnaround #Strong Demand #Snb Debacle #Snb Support
Monthly chart
SNB's decision to abandon EUR/CHF floor on January 15th 2015 sent USD/CHF all the way down to 2011 lows. The actual low was around 0.7250 or roughly just 70% of the value before the announcement. The turnaround was equally impressive as, after barely two months, the pair retested pre-SNB range between parity and 1.03. It declined from there but has been holding above 20 and 50 month SMA while 100 month SMA and the descending trendline (drawn of 2003, 2005, 2006, 2008 and 2010 highs…
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al_dcdemo 18 Nov.

UPDATE 4: Swissie broke above the March high (~1.0130) in yesterday's trading and rose to the highest level since SNB abandoned EUR/CHF floor on January 15th. Year's high (~1.0290) is the next target. After that, some resistance is expected into 1.05 level and then at July/August 2010 highs near 1.0650. Support is expected at 1.01 and more at the parity level (1.00).

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al_dcdemo 22 Nov.

UPDATE 5: Swiss franc was the loser of the week as it lost a cent and a quarter against the dollar. Weekly range was worth a cent and three quarters. The pair is still carried by technical momentum that has been in place since the current upswing began in mid October. The level the pair is trading at is the highest since SNB decided to discontinue EUR/CHF floor in January.

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al_dcdemo 23 Nov.

UPDATE 6: As is usual, there's little of note on the calendar for the week ahead coming out from Switzerland. U.S., however, will report several important data points: Prelim GDP, CB Consumer Confidence and (Core Durable) Goods Orders. Technically, the pair is still in a breakout mode. It closed last week above March high (~1.0125) but below year's high (~1.03). The latter will be watched closely in the coming days.

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al_dcdemo 27 Nov.

UPDATE 7: Swiss franc lost about a cent against the dollar this week. The pair's weekly trading range was slightly wider than the previous week's one but it didn't exceed two cents. The pair broke above January high and to the highest level since 2010. The breakout took place on Friday in thinner liquidity conditions and many are pointing their fingers towards the SNB.

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al_dcdemo 29 Nov.

UPDATE 8: There will be plenty of Swiss macroeconomic data points released next week ahead but nothing really market moving. U.S. data released in the week ahead includes: ISM Manufacturing PMI, ISM Non-Manufacturing PMI and NFP report. The pair will likely pull back a bit and consolidate in the beginning of the week but the rally doesn't appear to be done yet. 1.0450 - 1.0500 is the next target.

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Is USD/CHF setting up for a break higher?

al_dcdemo Posted 29 Sep. as Analysis on USD/CHF, Target: 0.9875, Date: 2nd of November, 12:00 GMT  in #Technical analysis #Confluence #USD/CHF #Symmetrical Triangle #Bullish Picture #Turnaround #Strong Demand #Turmoil #Snb Debacle #Snb Support
Monthly chart:
SNB's decision to abandon EUR/CHF floor on January 15th 2015 sent USD/CHF all the way down to 2011 lows. The actual low was around 0.7250 or roughly just 70% of the value before the announcement. The turnaround was equally impressive as, after barely two months, the pair retested pre-SNB range between parity and 1.03. It declined from there but has been holding above 20 and 50 month SMA while 100 month SMA and the descending trendline (drawn of 2003, 2005, 2006, 2008 and 2010 high…
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al_dcdemo 26 Oct.

UPDATE 7: After weak pullback in the first hours of the week, Swissie extended its rally and is set to post eight consecutive day of gains. To the delight of swing traders, these kind of multi day streaks are very frequent in major currency pairs recently. The pair is currently trading a couple of pips below the September high (~0.9840). Break above would flush some stops and open door to the August high (~0.99), near the last big figure before parity (1.00). 0.98 may prove to be the first stronger support on the downside.

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al_dcdemo 30 Oct.

UPDATE 8: Swissie traded to the highest since March after hawkish FOMC on Wednesday, breaking above August high (~0.99) in the process and to as high as 0.9957. Selling ahead of parity (1.00) was enough to stall the ascent and the pair has been backing and filling for two days now. September high (~0.9840) is already playing an important role as support and remains the first test on whether this rally still has legs or another deep pullback will be needed before the pair finally breaks above parity.

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al_dcdemo 31 Oct.

UPDATE 9: Rather than just continuing higher in the week ahead, I think the pair will retrace some of its recent gains first. 38.2% retracement of the October 15th to 28th rally comes in near 0.9775 and 50.0% retracement above 0.97. 50 DMA is currently running just below but will most likely rise above that in the days ahead. 0.9750 is the potential take off point. If it fails, 100 and 200 DMA will come back into focus.

foreignexchange avatar
foreignexchange 2 Nov.

Great Analysis : )

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al_dcdemo 2 Nov.

UPDATE 10: The pair started the week sideways, continuing the tight range from the last week. It is currently trading near 100 month SMA, a level that capped the pair twice earlier this year. Conditions for a sustained break above the level seem to be in place. All in all, I'm pleased with the prediction as price action in this contest period conformed well to my expectations and ended with a great outcome.

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USD/CAD to climb some more

al_dcdemo Posted 26 Sep. as Analysis on USD/CAD, Target: 1.3425, Date: 2nd of November, 12:00 GMT  in #Technical analysis #Oil #USD/CAD #Breakout #Uptrend #Rate Cut #Strong Demand #Eleven Year Highs #Weak Fundamentals #Second Wave
Monthly chart:
The pair is in uptrend since 2011. It broke above 38.2% retracement (of the 2002 to 2007 decline) in January and then traded around 50.0% retracement for nearly three months. In April, the pair pulled back deep enough to clear stops below 1.20. The confluence of the broken trendline (drawn off 2003, 2004 and 2009 highs) and 38.2% retracement wasn't even properly retested before the pair resumed its uptrend. It is currently trading at eleven-year highs.
Weekly chart:
After Q1 range…
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al_dcdemo 27 Sep.

UPDATE 1: Apart from GDP, there's little coming out from Canada in the week ahead. Events from the US will again be in focus: Fed speakers, CB Consumer Confidence, ISM Manufacturing PMI and NFP figures. There's resistance zone between July 2004 high (1.3385) and 1.35 which includes 61.8% retracement of the 2002 to 2007 decline (1.3470). 50 DMA has held the pair since June and is the first stronger level on the downside.

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al_dcdemo 29 Sep.

UPDATE 2: Uptrend in Loonie is slow but persistent. The pair has posted (yet another) new eleven-year high today, breaking above last Thursday's high by 15 pips before pulling back. The drivers remain weak commodities and general risk-off sentiment. Hawkish comments from Fed speakers yesterday didn't help it either. First stronger intraday support is seen at 1.3385 - 1.3400 and then between 1.3335 and 1.3365. There's quite a few resistance levels stacked up ahead of the big 61.8% retracement.

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al_dcdemo 2 Oct.

UPDATE 3: This is shaping to be the best week for the Canadian dollar since June. After posting new eleven-year high on Tuesday, the pair turned sharply lower on Wednesday. Follow through selling on Thursday was cemented on Friday, after the release of US NFP report for September which was a big disappointment. The pair's shorter-term correlation with oil faded a bit but it's the longer-term one that really counts.

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al_dcdemo 9 Oct.

UPDATE 4: Commodities rallied this week with the oil (WTI) gaining about $4, which is even more significant (8%) in percentage terms. Loonie has convincingly broken below three big support levels: 50 DMA (currently ~1.32), 2008 high (1.3064) and 1.30 big figure level. 100 DMA is the next one ahead of Q1 highs between 1.2800 and 1.2835. Momentum is strong and may easily carry it another couple of cents lower.

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USD/CAD to continue motoring higher

al_dcdemo Posted 27 Aug. as Analysis on USD/CAD, Target: 1.3325, Date: 1st of October, 12:00 GMT  in #Technical analysis #Oil #USD/CAD #Breakout #Uptrend #Rate Cut #Strong Demand #61 8 Retracement #Eleven Year Highs #Weak Fundamentals
Monthly chart:
The pair is in uptrend since 2011. It broke above 38.2% retracement (of the 2002 to 2007 decline) in January and then traded around 50.0% retracement for nearly three months. In April, the pair broke back down and continued lower to clear stops below 1.20. The confluence of the broken trendline (drawn off 2003, 2004 and 2009 highs) and 38.2% retracement wasn't even properly retested before the pair resumed the uptrend. It is currently trading at eleven-year highs.
Weekly chart:
A…
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al_dcdemo 27 Sep.

UPDATE 8: Apart from GDP, there's little coming out from Canada in the week ahead. Events from the US will again be in focus: Fed speakers, CB Consumer Confidence, ISM Manufacturing PMI and NFP figures. There's resistance zone between July 2004 high (1.3385) and 1.35 which includes 61.8% retracement of the 2002 to 2007 decline (1.3470). 50 DMA has held the pair since June and is the first stronger level on the downside.

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al_dcdemo 29 Sep.

UPDATE 9: Uptrend in Loonie is slow but persistent. The pair has posted (yet another) new eleven-year high today, breaking above last Thursday's high by 15 pips before pulling back. The drivers remain weak commodities and general risk-off sentiment. Hawkish comments from Fed speakers yesterday didn't help it either. First stronger intraday support is seen at 1.3385 - 1.3400 and then between 1.3335 and 1.3365. There's quite a few resistance levels stacked up ahead of the big 61.8% retracement.

WallStreet6 avatar
WallStreet6 30 Sep.

Great analysis and an accurate forecast!

fxsurprise8 avatar
fxsurprise8 30 Sep.

gl! only 15 pips away right now

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al_dcdemo 1 Oct.

Thanks! Let's hope it trades back above the big figure. :)

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USD/CAD to extend gains in the weeks ahead

al_dcdemo Posted 30 July as Analysis on USD/CAD, Target: 1.3175, Date: 1st of September, 12:00 GMT  in #Technical analysis #Oil #USD/CAD #Boc #Rally #Confluence #Uptrend #Rate Cut #Rebound #Strong Demand
Monthly chart:
The pair is in uptrend since 2011. It broke above 38.2% retracement (of the 2002 to 2007 decline) in January and then traded around 50.0% retracement for nearly three months. In April, the pair broke back down and continued lower to clear the stops below 1.20 level. The confluence of the broken trendline (drawn off 2003, 2004 and 2009 highs) and 38.2% retracement wasn't even properly retested before the pair resumed its uptrend.
Weekly chart:
After Q1 range support at 1.2375 gave…
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al_dcdemo 16 Aug.

UPDATE 6: Inflation, retail sales and wholesale sales reports are the main Canadian data points in the week ahead. US will report its monthly inflation figures too. Despite all that, the main driver remains the oil and if it convincingly breaks to the downside, the pair will mostly likely follow suit by rising above the cycle-high set on August 5th. Demand shall start coming in at 1.3060 and into 1.30.

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al_dcdemo 28 Aug.

UPDATE 7: When the oil fell to new six-year lows on Monday, the pair was quick to post new six-year highs. The oil was consolidating on Tuesday and Wednesday and so was the pair. However, when the oil rallied strongly on Thursday and Friday, the pair failed to follow suit. The reason for this may lay in the current risk-off environment and the fact that the pair didn't sell off as strongly as other commodity currencies.

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al_dcdemo 29 Aug.

UPDATE 8: Canada will release GDP, Trade Balance and jobs reports in the week ahead. Along with ISM Manufacturing PMI, ISM Non-Manufacturing PMI and NFP reports from the US I think there's enough on the calendar to spark some volatility. However, the main story will be the oil. If it continues to rally in absence of turmoil in global stocks, the pair may well try to catch up by selling off.

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al_dcdemo 31 Aug.

UPDATE 9: Oil staged an impressive intraday turnaround in which it rose to 49.30 from 43.60 in under five hours. That was the third consecutive day of gains and the fifth day of a massive short squeeze that started on August 25th. Loonie finally took notice and followed it lower - more than two cents from the high of the day. The first strong support zone is seen between 1.30 big figure level and 2009 high (1.3064).

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al_dcdemo 1 Sep.

UPDATE 10: After more than five and a half dollar rally, the oil stabilized today and so did the Loonie. The pair retested yesterday's low (~1.3115) in the Asian session and then rallied a good cent from there before it pulled back. It is currently trading near 1.32, just above my target level of 1.3175. I'm happy with the prediction, not only due to it ending near the target but also because the pair behaved in a similar way that I expected it to.

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