- Technically, Bullish candles with big real body take off USDCAD rallies above DMAs, can it be double bottom pattern on intensified bullish momentum? Yes, the pair forms 1st bottom at 1.2887, 2nd bottom at 1.2884 levels.
For now, the bulls are intensified as the momentum is also confirmed by both RSI & stochastic curves show upward convergence (refer daily chart).
- While the major trend spikes through rising channel pattern which is bullish in nature, shooting star pops-up at channel resistance and hammer pattern at channel supports. For now, rallies spike above 7EMAs on hammer formation at 1.3041 levels, strength in uptrend is yet to be confirmed by the momentum oscillators (RSI & stochastic curves) have still been little indecisive though bullish bias. On the lower side, even if you see abrupt slumps, the near-term support is seen at around 1.3038 levels.
- Well, we have revised our CAD forecasts weaker in light of a more hostile trade policy environment, which may last through US mid-terms, and some supply- bottleneck renewed downside risk in crude prices. We expect USDCAD now to remain at 1.3375 by Q3, the high end of the range seen recently, before moving back towards the middle of the range around the turn of the year (end-17 revised to 1.27 from 1.24 prior) on account of escalating US and other economies trade war. But for now, scenarios seem to be turning around the table.
- Trade tips: Contemplating prevailing bullish sentiments of this pair, at spot reference: 1.3068 levels, it is wise to trade double touch options using strikes of 1.3085 levels and attain exponential yields.
- As we could foresee upside risks in the weeks to come, on hedging grounds, we advocate initiating longs in USDCAD futures contracts of mid-month tenors with a view to arresting further upside risks.
Currency Strength Index: FxWirePro's hourly CAD spot index is flashing at -116 levels (which is bearish), while hourly USD spot index was at 156 (bullish) while articulating at (13:14 GMT). For more details on the index, please refer below weblink:
