- NAFTA talks have finally resolved positively over the weekend.
- This has reinforced the global shift already being seen across asset classes towards a “risk on” environment, easing global trade war fears.
- This has been particularly positive for the Canadian Dollar, with the USDCD FX rate plunging lower, to re-energise both the short- and intermediate-term bearish trends.
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Short- and Intermediate-term bear themes re-energized
A Friday plunge through supports at 1.2990 and 1.2941, and once more already Monday below the key level at 1.2880 (plus 1.2855 and to probe 1.2814), completely rejecting last week’s probe just above our 1.3064/78 resistance zone, thereby re-energizing bearish forces from the previous September breakdown, keeping the bias still to the downside on Monday.
We see an intermediate-term bearish theme.
- We see a negative tone for 1.2811 then to aim at 1.2738 and 1.2725, possibly even down towards 1.2714
- But above 1.2888 targets 1.2943 and maybe even 1.3020.
Intermediate-term Outlook – Downside Risks: Whilst below 1.3226 we see a downside risk for 1.2725.
- Lower targets would be 1.2536, 1.2250 and 1.2062/00
- What Changes This? Above 1.3226 shifts the intermediate-term outlook straight bullish.
4 Hour USD/CAD Chart