- The “risk off” activity seen from early December has intensified over the past week, with global slowdown concerns impacting negatively on the major commodity currencies, including the Australian, New Zealand and Canadian Dollars.
- Furthermore, alongside and partially driven by this “risk off” theme, the Oil price continues its path to lower prices as evident throughout Q4, with another acceleration lower into latter December.
- This Oil price weakness also puts downside pressures on the Canadian Dollar, propelling USDCAD to new multi-months highs.
- Below we look at the technical risks and upside targets for USDCAD.
A Thursday dip and a rebound again from just below our initial support at 1.3468 (from 1.3442) and to then push to another new cycle high above 1.3508, sustaining the bull tone from the mid-December surge up through the prior 1.3455 cycle peak, to keep the bias higher Friday.
The early November push above 1.3226 set an intermediate-term bull tone.
- We see an upside bias for 1.3539/47; break here aims for 1.3579, maybe 1.3612.
- But below 1.3442 aims for 1.3411 and opens risk down to 1.3388/70.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.3500.
- Higher targets would be 1.3777 and 1.4000/17.
- What Changes This? Below 1.3157 shifts the outlook back to neutral and then through 1.3123 would quickly see a bear theme.
4 Hour USDCAD Chart