15 Jul 2014
USD/CAD: Technical evidence base found - TDS
FXStreet (Bali) - According to TDS FX Team, technical evidence is accumulating to suggest that USDCAD may have found a base.
Key Quotes
"Technical evidence is accumulating to suggest that USDCAD may, finally, have found a base. Short-term patterns show firm support emerging in the low 1.06 zone through late June and early July, much as we had expected, with the USD looking heavily oversold on a range of timeframes as the market started to bump up against some very meaningful medium-term support points (see below)."
"The short-term charts reflect the sharp bounce in the USD Friday after successive tests and rejections of 1.0620/30; a minor double bottom looks to have formed which suggests that USDCAD has not, yet, realized its full potential (measured move target of 1.0766) in the short-term. We look for solid support on dips to 1.0685/95 now."
"If the short-term charts are modestly supportive for the USD, the broader picture is more constructive still. We had expected firm support to emerge in the low/mid 1.06 area—major trend and retracement support"
"And we now think price is signaling a strong rejection of the low 1.06 area via a bullish outside range day Friday and a more complex bull reversal signal on the weekly charts (bullish “morning star” pattern, see below)."
"The low for the extended correction in funds from the 1.1277 high looks to be in. With CAD positioning/sentiment more neutral now, we think the stage is set for a rebound in funds. A push through resistance in the 1.0820/30 area would be a very bullish signal from here."
Key Quotes
"Technical evidence is accumulating to suggest that USDCAD may, finally, have found a base. Short-term patterns show firm support emerging in the low 1.06 zone through late June and early July, much as we had expected, with the USD looking heavily oversold on a range of timeframes as the market started to bump up against some very meaningful medium-term support points (see below)."
"The short-term charts reflect the sharp bounce in the USD Friday after successive tests and rejections of 1.0620/30; a minor double bottom looks to have formed which suggests that USDCAD has not, yet, realized its full potential (measured move target of 1.0766) in the short-term. We look for solid support on dips to 1.0685/95 now."
"If the short-term charts are modestly supportive for the USD, the broader picture is more constructive still. We had expected firm support to emerge in the low/mid 1.06 area—major trend and retracement support"
"And we now think price is signaling a strong rejection of the low 1.06 area via a bullish outside range day Friday and a more complex bull reversal signal on the weekly charts (bullish “morning star” pattern, see below)."
"The low for the extended correction in funds from the 1.1277 high looks to be in. With CAD positioning/sentiment more neutral now, we think the stage is set for a rebound in funds. A push through resistance in the 1.0820/30 area would be a very bullish signal from here."