Danske Research Team
Danske Bank A/S
This week we present one strategy: Stay long USD/CAD
USD/CAD – Corrective channel break to focus 61.8% at 1.1688 next
- Strategy Summary – Stay long or buy into dips for gains to 1.1688 and then 1.1865. Raise stop to or place a stop under the 1.1122 low.
USD/CAD has been easing lower within a corrective channel off the current year to date high at 1.1466. This later level was reached following the earlier up-swing from the late October higher low at 1.1122. A major base, completed in June/July of this year, though, remains the market’s key driving force, and this formation continues to project further significant longer-term strength.
Momentum supports/confirms the markets positive structure, and a break above 1.1403, the 11 November minor lower ceiling, would trigger the start of the next up-leg, through 1.1466, towards 1.1688, the 61.8% retracement level of the major March 2009 to July 2011 decline (not shown). Through this point then opens 1.1717/25, where equality of the 1.0182-1.1279 rise from 1.0620, merges with the July 2009 peak. A breach of this region then focuses the major reversal’s projected target at 1.1865.
Immediate support rests at 1.1260, while only a loss of late October’s lower rejection at 1.1122 would cause concern.
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