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4x Target

USDCAD Discussions

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As the week comes to a close we bring to you two pairs today. The CAD pairs from the USD and YEN series. Expecting the Canadian Dollar to weaken against the US Dollar and Yen.

The charts below explain how the movement is expected to happen.

Happy trading everyone & have a good weekend!

Best

TradeCuts.

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5aa711c1a5e60_cadjpy1mar.jpg.5e60c07ee25b62b754c1793d6898744d.jpg

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12_11_11_USDCAD_4H

 

Negative divergence points to a short term pullback on 5th wave

attachment.php?attachmentid=32770&stc=1&d=1352683618

 

Hi Auto trader,

Could you please expand on this divergence theory that you are using. I would be really interested to know how it works. Have you seen good results with this theory? If yes, approximately what percentage?

Thanks

TradeCuts.

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Lets look back to USDCAD and remember that last week we saw a triangle/bullish flag, a bearish divergence, AND a resistance level approaching. Here we are today dealing with those sings and signals. From 1.11 the price has fallen sharply and given me confirmation that my signals and indicators (tho they're delayed) did not steer me in the wrong direction.

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Crude oil remains Canada's biggest dollar export, and this will continue, but the dollar amount may be reduced because of the global oil glut. The Canadian economy is much more than oil or commodities, but the energy sector has the biggest impact on the price of the loonie. The question is where might the loonie be trading if WTI crude were tp sell down into the seventies.

2_usdcad-d1-excel-markets.png.ce778c43dfafe0d16bbac9a855187342.png

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Washington special interests once more prevailed this week when they denied passage of the proposed Canadian Keystone XL pipeline. It has now been six years since initially proposed, and for six years the US government has failed to give Canadian permission to construct this pipeline. As proposed it would ship about 800,000 barrels of oil per day from Alberta Canada to Cushing Oklahoma, and subsequently to the US Gulf.

 

Failure to pass the bill in the US Senate was initially viewed as bearish news for the loonie, but the sell off did not last long. Passage was a long shot at best in the current lame duck session, so traders should not be surprised at the out come.

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While oil consumers get a bonus, the producers income takes a hit. Recently Canada had been producing and exporting over 3 millions barrels of oil per day to the US. A 50% reduction will negatively affect the Canadian balance of trade and slow their economy as investment and employment in the oil patch slows. Their currency, in part because of the energy price, has been depreciating.

 

We have two apparent mega trends, demand for safe haven pounds and a disdain for the Canadian Dollar. Since November the GBPCAD has soared from 1.75 to 1.9250. This is a big move, but if we look at a monthly chart the pound may be breaking out, with blue sky above, and perhaps as much as another 1000 pips or more if the fundamental trends continue.

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Technically the pair is at the bottom of its 1.2800-1.2400 range and a sharp break below would suggest a distribution pattern. But if the range holds it may simply be a consolidation in what could still be a long term up trend.

USDCAD_04_15.2015-470x450.jpg.f5feed8bf203ffc1e4ae2854e2a73642.jpg

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Technically the pair is at the bottom of its 1.2800-1.2400 range and a sharp break below would suggest a distribution pattern. But if the range holds it may simply be a consolidation in what could still be a long term up trend.

 

Yeah the pair continued uptrend I expect it to test 1.31 soon on NFP.

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The Canadian dollar continues to gain ground, and has inched higher in the Thursday session. Currently, USD/CAD is trading at 1.2891, down 0.10% on the day. On the release front, there are no Canadian data releases. In the US, unemployment claims rose to 229 thousand, higher than the forecast of 225 thousand. On Friday, the US releases durable goods and housing reports.

It’s been a good week for the Canadian dollar, which has gained 1.6 percent against the greenback. This has erased most of last week’s losses. There has been some good news on the NAFTA front, as the US appears to have softened its rigid negotiation position. 

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What are your thoughts guys on near-term price direction? Should we expect that dollar will appreciate further pressuring CAD? Oil market looks really fragile and it is well-known that CAD is quite sensitive to commodity price swings.

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