Chart of the day – USDCAD Rally as BoC cut growth forecast

USDCAD showed a strong bullish rally after the Bank of Canada downgraded the GDP forecast Q4’15 through Q2’17 while core inflation remain stable and weaker oil price keeps headline inflation depressed. The Bank also kept the overnight rate at 0.50% as expected by analysts.

On Technical Analysis profile:

The trend showed more possible uptrend in the short and medium term while on the long term (using Monthly chart timeframe) the price action on the upside may loose momentum. The charts analysis below better explains (4hrs – Monthly Timeframes):

     USDCAD 4hr Chart                                                                                       Source: Marketscope

Bias: Long with short term price projecting at 1.3182

Neckline of the bullish Head and Shoulder pattern breached at 1.3032 and MACD showing strong momentum (histogram bar rising above pervious).   

    USDCAD Daily Chart                                                                                     Source: Marketscope

Sentiment: Long with key resistance 1.3450 to watch.

In the daily timeframe, price action finds support on SMA 100 and key technical resistance level now turned at 1.2822 (16/10/2015) while MACD histogram losing the downside momentum. Currently the daily chat reflect, a close above long and short term moving averages with MACD histogram formed a bar above the water mark and RSI 14 ay period trending up.

    USDCAD Monthly Chart                                                                               Source: Marketscope

Sentiment: Long with caution (tight risk level) as momentum indicators shows signs of extreme trend

The monthly time continue to suggest strong uptrend though the price action a correction in the current monthly candle formation.

 

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