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USD/CAD – Week 15 – Preparing to test the resistance level.Last week, USD/CAD continued to consolidate underneath the upper channel line and at the moment it looks like it may prepare another impulse that could test the resistance level. There is a possibility that the price could drop even more into a deep correction that can reach the support area before starting our expected bullish move. Trade with care. Best regards, Financial Flagship Disclaimer: The analysis provided is purely informative and it should not be used as financial advice. Remember that you need a plan before you start trading; so, take this knowledge and use it as a guidebook that will ultimately help you understand the market and easily predict your next move.
Long
by financialflagship
12
CAD - FUNDAMENTAL DRIVERS1. The Monetary Policy outlook for the BOC: For the past few months, the BOC has been one of the least dovish central banks among the majors. After recent data surprised meaningfully to the upside, market participants have been speculating that the bank will look to taper as soon as the H1 2021. This view was confirmed when the bank announced a discontinuation of their market functioning purchase programs in March. After the most recent batch of econ data (especially jobs data), the market is expecting the bank to announce a reduction in QE purchases as the April meeting. 2. Commodity-linked currency with dependency on Oil exports: Oil staged an unprecedented recovery after hitting rock bottom in 2020. The move higher has been partly driven by (1) supply & demand (OPEC’s production cuts); (2) improving global economic outlook (vaccine roll out and monetary and fiscal stimulus induced recoveries); (3) rising inflation expectations (reflation). Even though further gains will be an uphill battle after the push higher, the bias remains positive in the med-term as long as the supportive factors and drivers remains intact and should be supportive for the CAD in the med-term. 3. Developments surrounding the global risk outlook. As a high-beta currency, CAD has benefited from the market's improving risk outlook over recent months as participants moved out of safe-havens and into riskier, higher-yielding assets. Also, as a pro-cyclical currency, the CAD enjoyed upside alongside other cyclical assets after moving into an early post-recession recovery phase with expectations of global synchronized recovery. Even though the risks remain surrounding the virus and thus global economic outlook, the success of the global vaccination roll out should prove supportive for the CAD.
by thunderpips
3
USD CAD (Dollar Loonie) Here on the loonie we have a potiental shark pattern or 5-0 pattern setting up. it is either a bullish 5-0 pattern or bearish shark pattern. We are hoping to see price hit the horizontal yellow line and move down; however, there is a major resistance level just a few pips above the pattern. So, i expect to see PA move a bit into the resistance area and get rejected. i will want to see some type of confluence on the oscillators too, along with some structural pattern. Sorry for not going into it any deeper I am behind on some school work and I am also getting back into the 4H time frame trading gonna slowly get down to the 1H again. I am also in the process in making a few courses as well that covers harmonic trading along with a myriad of other topics. When the courses go live i will upgrade my TradingView package to Premium and advertise them on my TradingView.
Short
by ARegularGuy
CAD - CENTRAL BANK ANALYSISObjective: The Bank of Canada Act 1985, requires the BoC's to regulate credit and currency, control and protect the external value of the national monetary unit and to mitigate fluctuations in the general level of production, trade, prices and employment within the scope of monetary action. Since 1991, upon the adoption of inflation targeting, the BoC has also been required to keep inflation within a range of 1-3%. As of February's report, inflation in Canada stands at 1.1% (1.0% prior) while the BoC's core measure slowed to 1.2% from a prior of 1.6%. Canada's other core measures - Median, Trim, Common - printed at 2.0%, 1.9% and 1.3% respectively. Situation: At their March meeting, the BoC left monetary policy unchanged with the Overnight Rate remaining at its record low 0.25%. The BoC refrained from commenting on potential tapering, but stated that they continue to gain confidence in the strength of the recovery and the pace of purchases of government bonds will be adjusted as required. The BoC stated they will continue to provide the appropriate degree of stimulus to support the economic recovery and achieve its inflation objective, stressing there is still considerable economic slack and uncertainty.
by thunderpips
3
CAD - WEAK BULLISHFrom its historic low of -$40.30 on April 20th 2020, WTI saw an unprecedented recovery in the months that followed. Although this recovery became more hard-fought once WTI breached $40 per barrel, gains continued throughout the rest of 2020, breaking above $50 per barrel in the first week of 2021 and a new yearly high of $67.94 on March 8th. Further gains for the commodity are likely to remain an uphill battle; however, with the roll-out of coronavirus vaccines, the bias for WTI should remain to the upside as the vaccine rollout should prove to be a positive factor for the global economic outlook and, hence, the outlook for oil prices. As a commodity-linked currency and Canada's dependence on its oil exports, we expect CAD's fundamental outlook to remain closely tied to the global economic outlook and oil prices. With both of these factors seeing a cautiously positive outlook, CAD holds a weak bullish fundamental bias.
by thunderpips
5
CAD: Current Sentiment DriversLatest Developments: March 17 – Canadian CPI for February increased to 1.1% Y/Y, versus a prior of 1.0%. CPI printed at 0.5%% M/M versus a prior of 0.6%. Regarding the BoC’s core measures, Common CPI remained at 1.3% while Trimmed Mean increased to 1.9% and Median CPI slowed to 2.0%. March 10 – At their March meeting, the BoC kept policy unchanged as expected; and failed to mention possible tapering in April. However, the BoC did note that bond purchases would be adjusted as necessary, and they would continue to provide appropriate stimulus to support the economy and achieve the inflation objective. March 2 – Canadian GDP for Q4 printed at 2.3% Q/Q and 9.6% Q/Q Annualised. The overall encouraging report resulted in an increase in speculation that the BoC could reduce its pace of bond purchases soon than previously expected. February 5 – Canada’s employment report for January saw the Unemployment Rate increase to 9.4% (prior, 8.6%) with Employment Change printing at -212.8K (prior, 62.6K). Future Sentiment Shifts: With oil prices steadily climbing, the outlook for CAD remains stable; however, with that said, the coronavirus remains a significant risk to economies and, hence, to the outlook for oil. Additionally, with oil prices now trading around “fair value” levels, further gains for the commodity will be hard fought. Of course, the market’s risk tone, in general, will also remain influential and key to CAD’s outlook given its high beta status. The clearest bias for CAD will result when both oil prices and the risk outlook support one another, i.e. a positive or improving risk outlook and strength in oil prices. However, if these two factors contrast with one another, expect CAD price action to be choppy as the market’s focus shifts between development in oil markets and developments surrounding the coronavirus. Primary Drivers: Bank of Canada – Canada’s monetary policy outlook remains key to CAD’s fundamental outlook. Expectations for policy tightening will likely support CAD, while expectations for policy easing will likely pressure CAD. Oil prices – Oil is Canada’s largest export, accounting for over 17% of Canada’s exports. As such, CAD is highly correlated with oil prices; strengthening when oil prices rally and weakening when oil prices fall. Risk tone – Due to its high beta status, CAD is strongly correlated with the overall risk tone; strengthening in risk on environments and weakening in risk off environments. Global economy – Canada is a relatively open economy. As the world’s 12 largest export economy and with exports accounting for 34% of GDP, Canada’s economic performance and outlook is closely tied to the global economy and the global economic outlook.
by thunderpips
4
CAD - WEAK BULLISHFrom its historic low of -$40.30 on April 20th 2020, WTI saw an unprecedented recovery in the months that followed. Although this recovery became more hard-fought once WTI breached $40 per barrel, gains continued throughout the rest of 2020, breaking above $50 per barrel in the first week of 2021 and a new yearly high of $67.94 on March 8th. Further gains for the commodity are likely to remain an uphill battle; however, with the roll-out of coronavirus vaccines, the bias for WTI should remain to the upside as the vaccine rollout should prove to be a positive factor for the global economic outlook and, hence, the outlook for oil prices. As a commodity-linked currency and Canada's dependence on its oil exports, we expect CAD's fundamental outlook to remain closely tied to the global economic outlook and oil prices. With both of these factors seeing a cautiously positive outlook, CAD holds a weak bullish fundamental bias.
by thunderpips
2
Bearish Trend The loonie is inside a bearish strong trend, we can clearly see it in bigger timeframes such as weekly and daily, now let s analyze the h4 chart: the price is capped by the 200 sma and is in the Supply zone (the orange rectangle), this zone is really strong because we see that it worked perfectly several times, in addition the stochastic has created the so-called Hidden divergence that shoudl push down the price, I will keep a bearish view until the bearish trendline and the moving average will not be broken and I expect the pair to go don to make new lows. Fundamentally we can notice that in last months oil prices went up and they are highly correlated with the value of the Canadian dollar wich is one of the main exporters, in addition yesterday Deputy governor Toni Gravelle highlighted that the reduction of monthly asset purchases is coming, and traders are now speculating that it could as early as April 2021. Gravelle stipulated that the process would be slow with gradual reductions in purchases in provincial debt, corporate debt and the main government bond programs. This tapering is likely to appreciate the value of the CAD, besides the Federal reserve will keep on suppporting the economy and the dollar will be under pressure again due to the fact that in the second part of the year the Inflation will not grow as high as expected previusly.
Short
by Dragon_Investments
Euro violent drop, Canada dollar violent rallyEach of these currency has been moving significantly, and you can see on the EURCAD chart that after a period of lower highs and lower lows bulls finally gave up and it looks like the price is capitulating. The Canadian dollar is in strong demand following the majestic surge of Oil that is still going on, it just made a new high, the most violent surge in months. The Euro is still a pyramid scheme going to zero, no reason for it to go up significantly just yet. The ECB has a meeting the 11. The Yen has been getting crushed against the USD and is underappreciated at the moment, I don't see it reverting in v shape without an extreme fall in valuation. A good potential short on EURCAD, perhaps long CADJPY too (part of the same trade / same risk exposure). I expect the price of EURCAD to continue down to 1.485, or as fake experts would say, something super specific, "the price target will be 1.48463".
Short
by MrRenev
2
USD/CAD Bullish ABCD--- Online JournalI wanted to post this chart as a reminder to myself and others of what not to do. I drew this ABCD pattern last week some time and then the pattern software picked it up later, but notice ho PA came down and tested the PRZ and the rocketed the he__ out of there. this is an example of a type 1 trade by Carney's definition. price comes in stabs the PRZ and leaves and never comes back. as a harmonic trader these trades are the nightmare for the system. Why? Because, you find yourself chasing the trade the entire time, and then you go from a 2:1, 3:1, or even 5:1 RR to a quick 1:1 or less RR just to have it retest the area to blow your stops out and move on up some more. I have done some significant damage to my account chasing these type of trades. So, this is a reminder to myself namely to DONT CHASE A TRADE. wait for the right set up. look for some consolidation or some indecision and then trade. Let the pair allow you to catch it, don't case it. The system works if I (or you if youre reading this) work it properly. Also, if there is a lot of news swirling around wait for the market to clam back down. when there is a lot of news coming out because of XYZ event the markets act irrational will blow patterns, harmonics, S&R levels, Supply/Demand levels, and etc. out of the water. The market acts irrationally in a rational manner, its a nightmare when the market acts irrational... irrationally. to my future self, this is your past self and you got this. the system works and you know it works. if you doubt yourself go back thorough our past ideas and see how well it works. if you are losing alot of trades ask if the market is acting irrationally in a rational manner or is it acting irrationally in an irrational manner? are we forcing trades? are we chasing trades? if so stop, because if not that money lost will not be there for when the right trade presents itself AGAIN later in the future when the market is acting like its normal self. If youre not me and you found this helpful great! if youre not me and found this NOT helpful...okay... so what?! ;) Happy Trading Future R.Guy and other traders!
Long
by ARegularGuy