Canadian Dollar Forecast Cautiously Bearish
USDCAD – The US Dollar refuses to break lower against the similarly resilient Canadian Dollar, giving us pause in our earlier calls for USDCAD weakness. Indeed, our Speculative Sentiment Index shows that traders have suddenly sold into recent USDCAD gains; the shift in mood may in fact point to further strength.
Our ‘Tidal Shift’ strategy went long from C$0.9983 as a result, but we hesitate to get enthusiastic about the trade and won’t show it on the DailyFX PLUS Trading Signals page until the pair breaks its multi-month range. Short-term resistance is at C$1.0040, and that remains a key line in the sand. Crude oil prices remain in a similarly tight consolidative range, and whether or not the NYMEX WTI Contract breaks below significant support near $104 may ultimately decide whether the USDCAD breaks its frustratingly tight congestion zone.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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