USDCAD Bullish (Even Without a Bearish Oil Signal)

Intermediate

USDCAD surged to another new cycle high for H2 2016 over the past week. Having signalled a more bullish shift back in early October, the recent setback questioned the bullish intermediate-term outlook. But the strong recovery effort from ahead of support at 1.2996 to the new recovery high has indicated a re-energised bullish team for late October and into November.

Moreover, this activity has occurred with the Oil price still at a relatively high level, but with threat of the Brent Crude Future making a short-term negative statement. Such a move would likely reinforce the bullish USDCAD viewpoint.

USDCAD

An extremely aggressive upside follow-through rally Friday through the 1.3314 cycle high, to re-energize the intermediate-term bull tone (signalled in October above 1.3296).

Furthermore, the advance since Wednesday’s aggressive dip and rebound from ahead of the strong 1.2996 support level (for a bullish Hammer pattern), keeps risks higher Monday.

For Today:

  • We see an upside bias through 1.3355; break here aims for 1.3405, then 1.3460.
  • But below 1.3305/00 opens risk down to 1.3230.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 1.3405 and 1.3576/87.
  • Above here targets 1.3838/59 and 1.4000/17.

What Changes This? Below 1.2996 signals a neutral tone, only shifting negative below 1.2651.

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Daily USDCAD Chart
USDCAD

Brent Crude Future

Still within the very near term erratic, non-trend theme, and despite the minor rebound Friday (52.10 capped) and we still see immediate negative pressures into Monday from the setback Thursday.

Despite the very near term, erratic consolidation phase, the early October push above 51.87 signalled an intermediate-term trend shift to bullish.

For Today:

  • We see a downside bias for 50.92; break here aims for 50.34, maybe 50.00/49.74.
  • But above 52.10 opens risk up to 52.72, maybe 53.14.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 54.12.
  • Above here targets 60.00.

What Changes This? Below 48.55 signals a neutral tone, only shifting negative below 45.57.

 

Daily Brent Crude Future Chart (December 2016 Contract)
Oil

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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