The currency pair reached last week to the resistance zone located around the level of 1.3101. Recently such high price levels we saw on July 24, and in 2008-2009. Strong gains last week were caused by poor GDP reading for Canada (-0.2% at the forecast 0.1%). It is not without significance for the Canadian dollar remain further declines in oil prices, to which the Canadian economy is strongly linked. It is also worth mentioning the good readings from the US, which always increases the chance of an interest rate hike in the US.
In my opinion, may be acting out recent increases. What, then, points to a correction?
1) RSI indicates the possibility of a trend reversal (negative divergence)
2) On the weekly chart appeared candle "hangman", which is a signal of a possible change in the trend;
3) strongly sold out pus, which soon should be directed to higher price levels. At the moment, oil is trading at around 47$. Demand should lead to increases in the vicinity of 51$, which automatically will be a strong support for the Canadian dollar.
Investors interested in this currency pair will surely follow in the next week, data from the US and Canada. On Monday we will know the ISM and PMI in the US. Then on Wednesday we will see US data on ISM and the PMI for the services. Important data from Canada will be announced on Friday, when it will be presented the data on the PMI unattended and the unemployment rate.
Note: in case of very good data from the US, can lead to further increases. In this case, the correction starts with a higher price level.
Any adjustment if it will take place, will only pause in further increases.
In my opinion, may be acting out recent increases. What, then, points to a correction?
1) RSI indicates the possibility of a trend reversal (negative divergence)
2) On the weekly chart appeared candle "hangman", which is a signal of a possible change in the trend;
3) strongly sold out pus, which soon should be directed to higher price levels. At the moment, oil is trading at around 47$. Demand should lead to increases in the vicinity of 51$, which automatically will be a strong support for the Canadian dollar.
Investors interested in this currency pair will surely follow in the next week, data from the US and Canada. On Monday we will know the ISM and PMI in the US. Then on Wednesday we will see US data on ISM and the PMI for the services. Important data from Canada will be announced on Friday, when it will be presented the data on the PMI unattended and the unemployment rate.
Note: in case of very good data from the US, can lead to further increases. In this case, the correction starts with a higher price level.
Any adjustment if it will take place, will only pause in further increases.