USD/CAD on the verge of a major rally?
Fawad Razaqzada October 29, 2016 12:20 AM
<p>Obviously there will be a lot happening next week from a fundamental perspective and we are expecting to see increased volatility in the financial markets […]</p>
Obviously there will be a lot happening next week from a fundamental perspective and we are expecting to see increased volatility in the financial markets across the board. But the focus of this short article will be on the technical aspects and specifically on the USD/CAD pair. Now, after the Bank of Canada’s shenanigans earlier in the week, the Loonie managed to eventually climb higher, reaching 1.3400. At the time of this writing, it looks set to close the week in the positive territory.
The long-term weekly chart of the USD/CAD points to significant gains as things stand. The key technical points to consider going forward:
- Bullish breakout above key 1.3295 resistance, now support, suggest path of least resistance to the upside
- Reclaiming the 55-week moving average is important – there was significant follow-through on previous occasions when the USD/CAD moved above this average
- This year’s earlier sell-off came to a halt between the long-term 38.2% and 50.0% retracement levels. This relatively shallow pullback is usually a very bullish sign
- Potential bullish objectives: 1.3655 (old support), 1.3840 (61.8% Fib) and 1.4065 (last weekly up candle prior to down move)
- Short-term bias bearish below 1.3295 on weekly closing basis. If so, 1.30 or lower could be the next stop
Have a good weekend!
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.