6 Jan 2015
USD/CAD: Pause ahead of new push higher - TDS
FXStreet (Bali) - Shaun Osborne, Chief FX Strategist at TDS, believes that USD/CAD should now see a minor pause ahead of another push higher.
Key Quotes
"USDCAD spent the middle of December onwards consolidating below the noted resistance zone in the upper 1.16s before finally making new cycle highs overnight. The move up may look as if it is stalling now but the mini-consolidation on the 6-hour chart, above, suggests that this is a minor pause ahead of another push higher, rather than a reversal."
"We note again that trend momentum oscillator studies on the short, medium and longer-term charts are aligned bullishly; this should mean limited scope for counter-trend corrections. We think minor dips in the USD—which may not extend much below today’s lows now—are a buy."
"USDCAD is back to testing the ceiling of the H2 2014 bull channel right out of the gate in the New Year. The strong technical underpinnings noted above suggest to us that, despite the drop back in spot to unchanged on the day after the sharp move up yesterday, the USD is holding the trend channel break at the moment just about. We rather think the near-term outlook (next 1-2 months) is bullish for USDCAD at least before the risk of a correction grows. We look for spot to test 1.20/1.22."
Key Quotes
"USDCAD spent the middle of December onwards consolidating below the noted resistance zone in the upper 1.16s before finally making new cycle highs overnight. The move up may look as if it is stalling now but the mini-consolidation on the 6-hour chart, above, suggests that this is a minor pause ahead of another push higher, rather than a reversal."
"We note again that trend momentum oscillator studies on the short, medium and longer-term charts are aligned bullishly; this should mean limited scope for counter-trend corrections. We think minor dips in the USD—which may not extend much below today’s lows now—are a buy."
"USDCAD is back to testing the ceiling of the H2 2014 bull channel right out of the gate in the New Year. The strong technical underpinnings noted above suggest to us that, despite the drop back in spot to unchanged on the day after the sharp move up yesterday, the USD is holding the trend channel break at the moment just about. We rather think the near-term outlook (next 1-2 months) is bullish for USDCAD at least before the risk of a correction grows. We look for spot to test 1.20/1.22."