News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here: https://t.co/EDvQdHfIPm https://t.co/tl54v6sKkX
  • Moving averages are extremely popular due to its easy-to-use nature and multitude of uses when trading. What are some popular moving averages and how can you use them? Find out: https://t.co/ik0wQ3MLGE https://t.co/heAYoTMDeR
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here:https://t.co/ZNs4Qi8ieG https://t.co/UqZBBPZiOl
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/rChAkNqPL2
  • Long wick candles are recurrent within the forex market. This makes understanding the meaning behind these candles invaluable to any trader to comprehend the market dynamics during a specific period. Learn about the importance of extended wicks here: https://t.co/SIpslvhX0J https://t.co/jVxcE1QUBs
  • Safe haven stocks also allow traders to diversify their portfolio and reduce risk. Learn if safe-haven stocks are made for you here: https://t.co/MTc4tUDD6c https://t.co/DOQ6tyzep9
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/WQLZ1X7gIY
  • but the next major point in my view to monitor will be 52.76 - at least in the short term.
  • #Brent having broken above the pre-OPEC drop off at 45.51 is a huge deal considering it failed to crack resistance there in August (leading to the invalidation of "uptrend 2") and the psychological significance of that level https://t.co/LkEyRxFhnq
  • The New Zealand Dollar looks poised to extend its push higher against its haven-associated counterparts on robust economic data and a less dovish stance from the RBNZ. Get your $NZD market update from @DanielGMoss here:https://t.co/vytr4OR1Jy https://t.co/ZcxEUWIm8O
USD/CAD Technical Analysis: Consolidation Could Precede Big Move

USD/CAD Technical Analysis: Consolidation Could Precede Big Move

2017-01-10 18:55:00
Tyler Yell, CMT, Currency Strategist
Share:

Talking Points:

The Canadian Dollar is strengthening without much help from Crude Oil, which looks to have stretched positioning not seen since 2014. Much of the strength attributed to the Canadian Dollar has been two-fold. First, the Bank of Canada has come out since their last Rate Announcement as decidedly less dovish (relatively hawkish) than anticipated, which helps communicate that the economy would have to begin struggling more than anticipated for the Bank of Canada to change course and move to a more dovish approach.

Second, the Canadian economy is catching some tail wind from growth expectations from the United States under perceived Fiscal Stimulus from President-elect Trump who takes office on January 20 and the price of Crude Oil stabilizing near $50. The low-$60/bbl range has been a compelling Wall Street target and a move to this level would likely keep the Canadian Dollar firm across the board.

As of Tuesday, January 10, 2017, the Canadian Dollar is the strongest currency in the G10 on a relative basis thanks to the combination of the two measures above and is remaining strong against notably weaker currencies like GBP, NZD, and the Japanese Yen.

USD/CAD Technical Analysis: Consolidation Could Precede Big Move

Interested in Joining Our Analysts, Instructors, or Strategists For a Free Webinar? Register Here

Economic data for the Canadian economy is rather light per the DailyFX Economic Calendar. Canadian Housing Starts did surpass expectations on Tuesday, but the data is seen as second-tier compared to the major themes discussed above.

Watching the chart below, we are starting to face major technical zones worth watching. First, while the Canadian Dollar is the strongest relative currency on an H4-basis, the price is consolidating above a Trendline drawn from the May low.

Given the preference of momentum continuation, until an exogenous shock displaces a very strong or weak currency, we’ll be on the watch for a move below this Trendline. Below the Trendline sites the 200-day moving average at 1.3097, which provided a strong bounce in mid-December. If the price cuts through the 200-DMA, traders would be right to keep an eye on a move to the 1.272% Fibonacci expansion of the late-December move at 1.2939. Below this soft-Fibonacci target is a confluence of Fibonacci & a prior price pivot of the August low at 1.2759, and if price breaks below there, many traders may become persuaded of a retest of the May low of 1.2460.

While momentum favors USD/CAD downside, the price is currently trading just below the base of the daily Ichimoku Cloud that has acted as flexible support in the move higher over the prior months. Additionally, from an Ichimoku perspective, the momentum or lagging line has yet to break below the cloud, which is typically one of the strongest indications of a confirmed reversal.

A break above the Ichimoku cloud near 1.3350 could indicate that the Canadian Dollars tenure as the strongest G10 currency has run its course. However, we’ll favor momentum continuation for now until proven wrong.

What Did The Analysts Learn After Trading Of All 2016? Click Here To Find Out

Multi-Month H4 USD/USD Chart: Testing Multiple Forms of Support

USD/CAD Technical Analysis: Consolidation Could Precede Big Move

Chart Created by Tyler Yell, CMT

Key Short-Term Levels as of Wednesday, January 10, 2017

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours.

USD/CAD Technical Analysis: Consolidation Could Precede Big Move

T.Y.

Interested in learning more about markets and trading strategies? Join Tyler and other DailyFX analysts for FREE every trading by registering HERE!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES