Short term
Trade view / 08 August 2016 at 12:32 GMT

Loonie may rebound

FX Consultant / IFXA Ltd

USDCAD soared on Friday, but the rally ran out of steam well before major resistance in the 1.3240-60 area and the pair has drifted lower ever since.  

USDCAD is in an intraday downtrend while trading below 1.3190, looking for a break of 1.3140 to extend losses back to Friday’s pre-US employment data lows.

The rebound in oil prices from Thursday’s low supported by reports of another Opec production cap meeting and comments from Opec president forecasting higher demand in the “latter part of 2016” should keep WTI bid.

The fallout from the strong US employment report will likely fade as the GDP data suggest that any hopes for a September rate increase are just wishful thinking. There aren’t any top-tier data from Canada or the US until Friday, leaving equity markets and oil to provide direction.

Management and risk description 

This trade is vulnerable to another drop in WTI prices. It is also vulnerable to renewed US dollar strength versus the majors on a risk-aversion move.


Entry: sell ½ USDCAD at market (currently 1.3145 balance at 1.3190.

Stop: 1.3215.

Target: 1.3040.

Time horizon: Four days.

USDCAD 30 minute with sell level and breakout support level noted:
Source: Saxo Bank 

USDCAD 1 hour with downtrend and take-profit target:

Source: Saxo Bank 

Oil hourly with intraday uptrend noted:

Source: Saxo Bank

USDCAD five-year daily with moving averages:

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Source: Saxo Bank

— Edited by Michael McKenna

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Non-independent investment research disclaimer applies. Read more
09 August
fxtime fxtime
A good call Mike .... :-)
09 August
Michael O'Neill Michael O'Neill
keeping my fingers crossed


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