Now that prices are driving into 1.3000 for the USDCAD, there are some yellow warning lights beginning to flash on an immediate move to the upside. With mixed signals showing below, bulls will want to manage risk and see how the price behaviour is in the 1.3050-1.3150 zone.
For a chart on the USDCAD, click here.
Let’s run through some of the main indicators we follow:
Elliott Wave Position - The Elliott Wave analysis suggests we are in wave v of (v) of [iii]. This is an ending wave at two different degrees of trend. Ending waves oftentimes sport divergence on common indicators like RSI. (Bearish)
Wave harmony – Multiple wave relationships show up in 1.3050-1.3150 price zone. These wave relationships are areas of harmony on the chart where prices are likely to receive a reaction. (Bearish)
Wave (v) = .618 * (i)-(iii) = 1.3055
Wave v = .382 * i-iii = 1.3059
Wave v = .618 * i-iii = 1.3147
Circle [iii] = 1.618* circle [i] = 1.3117
SSI – at -2.7, the vast majority of retail traders are trying to pick a top. Additionally, short open interest has increased 9.5% in the past week. SSI suggests a continued move higher. (Bullish)
OBV – several time frames (15 min, 30min, 3hr, 4hr, 6hr) are showing a divergence between this burst higher in price over the past 24 hours versus the on-balance volume. This suggests a lack of conviction through volume in the move higher. (Bearish)
To review the last USDCAD pick from July 8, see “USDCAD – Buy a Zip or the Dip”.
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