USD CAD Confirms Weekly Double-Top

The Canadian Dollar rallied to a 6-week high fueled by a much higherstock market and a break out to the upside in crude oil. Speculatorsare buying crude oil on expectations that a global economic recoverywill drive up demand for this key Canadian export.  The USD CAD weekly trend indicator chart indicates 1.1058 is the next downside target.

The Canadian Dollar rallied to a 6-week high fueled by a much higher stock market and a break out to the upside in crude oil. Speculators are buying crude oil on expectations that a global economic recovery will drive up demand for this key Canadian export.

The recent break in the USD CAD was ignited when the Bank of Canada announced but refrained from carrying out its plan to apply quantitative easing as a means of jump starting the economy. Its decision to take a “wait-and-see” attitude to see if the economy turned on its own has turned out to be the right one as it was announced today employers hired more workers in April. This came as a total surprise to analysts who were predicting another month of job losses.

The break in the USD CAD through the last swing bottom on the weekly chart at 1.1759 confirmed the double-top formation at 1.3015 and 1.3062. The swing chart is indicating that this downswing is likely to drive this market down to a retracement zone at 1.1058 to 1.0586 before serious buying resurfaces.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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