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Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
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Technical Update - Tour de CAD: USDCAD, AUDCAD, NZDCAD, CADJPY & EURCAD
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: USDCAD forming triangle corrective pattern in uptrend
AUDCAD uptrend likely to be extended
NZDCAD correction over and set for higher levels
CADJPY downtrend exhausting - for now. Likely to resume after a correction
EURCAD strong uptrend testing key resistance levels
Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team
USDCAD is forming a Symmetrical triangle like pattern. Break out needed for direction. If breaking bearish out and closing below support at around 1.3320 a sell-off down to around 1.30 could be seen. However, there is support at around 1.3225 where the 200 daily SMA will add to that support.
A bullish break out a move to 1.40 level i.e., around October peak is in the cards. Strong resistance at around 1.37.
Today's Market Quick Take from the Saxo Strategy Team
USDCAD is forming a Symmetrical triangle like pattern. Break out needed for direction. If breaking bearish out and closing below support at around 1.3320 a sell-off down to around 1.30 could be seen. However, there is support at around 1.3225 where the 200 daily SMA will add to that support.
A bullish break out a move to 1.40 level i.e., around October peak is in the cards. Strong resistance at around 1.37.
Medium term: USDCAD is in a correction phase. Underlying sentiment is bullish with all moving averages rising and RSI positive and no divergence. USDCAD seems likely to break bullish out of triangle pattern mentioned above. If the bullish scenario plays USDCAD would be set for a move higher to 1.4265 -1.4442
However, if USDCAD closes below 1.3225 a sell-off down to 200 weekly SMA should be expected with a possible dip down to the lower rising trendline.
AUDCAD has reached 1.764 projection of the recent correction but with no RSI divergence the uptrend could be extended to the 2.0 projection at 0.9618 where we are likely to see a correction.
To reverse the uptrend a close below 0.9260 is needed
Medium-term there could be further upside. Resistance at around 0.9515 is taken out. AUDCAD is on course to previous peak just below 1.00. Some resistance at around 0.9730.
NZDCAD medium-term correction seems to be over and the pair is set for a move higher. If NZDCAD breaks above 0.88, which the positive RSI indicates it will, next resistance and the 1.382 projection at around 0.90, and resistance at around 0.9255.
For NZDCAD to reverse the uptrend a close below 0.83 is needed.
CADJPY For several weeks RSI has been showing divergence strongly indicating the downtrend is exhausting. If CADJPY breaks above its short-term upper falling trendline a swift move to resistance at around 101 is likely.
However, the swift upwards move could be short lived. Medium-term the trend is down and if CADJPY is rejected at 101 or exhaust prior to reaching that level the downtrend is likely to resume pushing the pair to test support at around 92.60 possibly lower to the 200 weekly SMA below 90.
If CADJPY can close above the 55 weekly SMA and above 101.20 a new medium-term up trend is likely to be developed.
EURCAD is testing medium-term resistance at around 1.4645 and the 200 weekly SMA. RSI is indicating divergence but a EURCAD close above 1.4650 is likely to cancel that and send the pair towards resistance at around 1.50-1.51.
A close below 1.42 will reverse the medium-term uptrend sending the pair down to 1.40 -1.3750.
A close below 1.42 will reverse the medium-term uptrend sending the pair down to 1.40 -1.3750.
RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend
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