Canadian Dollar bullish threat into OPEC+ Meeting (USDCAD forecast)

Intermediate
  • Markets remain in “risk on” mode as we have highlighted in early April reports, most recently here spotlighting upside risks for the FTSE 100.
  • The S&P reinforced this view yesterday with a new recovery high.
  • In this environment, broadly speaking, the “risk currencies”; the Australian, New Zealand and Canadian Dollars should perform well, particularly versus the US Dollar, which is selling off currently, as it is viewed as a safe haven currency.
  • Although AUDUSD and NZDUSD have made solid gains in early April, USDCAD has not seen the equivalent downside move.
  • This is likely due to concerns regarding the future for the oil price, with Canada a notable oil exporter and therefore with the Canadian Dollar positively correlated with the oil price.
opec
  • Today’s OPEC + meeting may give some clarity to the future short-term oil price, with the risk skewed towards an agreement to contract supply, pushing the oil price higher.
  • This could take USDCAD notably lower.

USDCAD day trade outlook: Risk to the downside and key 1.3922

A spike higher and failure Wednesday from below 1.4108 resistance (from 1.4082), to push back lower and whilst below 1.4082 to just retain negative pressures from Tuesday’s selloff through 1.4008 support, to keep risks lower into Thursday.

  • We see a downside bias for 1.3987, 1.3941 and key 1.3922; a break below aims for 1.3847, maybe towards 1.3726/04.
  • But above 1.4082 quickly targets 1.4108, maybe even towards 1.4175.

USDCAD intermediate-term outlook

The late January push above 1.3185 set an intermediate-term bull trend.

  • Upside risks: We see upside risk for 1.4690, 1.5000 and 1.6184
  • What changes this? Below 1.3922 shifts the intermediate-term outlook straight to an intermediate-term bear theme.

4 Hour USDCAD Chart

Usdcad chart

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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