Thoughts on Canadian Dollar crosses

Andria Pichidi HFM

CADJPY & NZDCAD, H4 and Daily

The hawkish shift in the BoC’s tone, started with last Monday comments from Wilkins, who said the Bank is assessing the need for current stimulus, got the CAD buying started. The Bank’s shift appears to be fully priced in now. This week we have seen loonie to remain range-bound as WTI crude holds just over $44.

However today we have noticed some contradictory moves from Canadian Dollar and particularly in CADJPY and NZDCAD crosses. In 4hour chart of the NZDCAD, we have noticed a bullish engulfing pattern, which has been reinforce by the fact that the pair broke the 20-period MA and is currently moving upwards above the moving average line. The Stochastic is at 23, moving away from the oversold territory, while RSI is neutral at 48.

Therefore, a Long position has been taken, with entry at 0.9575. Meanwhile Targets have been set at 50 period MA which is at 0.9620 and 0.9640. Notable is the fact that our position is against the Daily timeframe where the pair moves sideways and the weekly timeframe in which the pair looks quite bearish. Support is at 0.9520, which is also the 200 period MA.

On the other hand, another position was taken but this time in a longer timeframe such as Daily one for CADJPY, which is against the previous position since it indicates on a possible weakens of Canadial Dollar against Yen. The particular pair has extended its upper Bollinger band pattern, while Parabolic SAR are still positive since last week and RSI is at 65, with plenty of upwards space to the oversold territory.

Additionally, in the weekly timeframe, the pair manage to break the 20 period MA and the 50 period EMA last week. This week keeps moving above these 2 moving averages. Meanwhile its RSI at the weekly timeframe is at 55.

Targets were set at 85.40 and 86.50, with entry at 84.40. Support is at 83.30.

Author

Andria Pichidi

HFM

Having completed her five-year-long studies in the UK, Andria Pichidi has been awarded a BSc in Mathematics and Physics from the University of Bath and a MSc degree in Mathematics, while she holds a postgraduate diploma (PGdip) in

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