Hoping for a Loonie turnaround against the greenback!

FX:USDCAD   U.S. Dollar/Canadian Dollar
The BoC’s (Bank of Canada) to reduce interest rates came as a bit of a surprise, but has given impetus to the US$ to extend its bull run against the loonie. The interest rate hike came early July, when the market was caught brooding ( as shown by the higher upper whisker of the candle just prior to interest rate increase – the formation is somewhat akin to a shooting star ). Then with the interest rate decision the greenback rallied and now another important signal is pointing to a reversal, and that is the bearish harami candlestick pattern. With the hope that the Canadian economy starts gaining some traction with interest rate reduction, it can be hoped that the loonie would start gaining some ground against the greenback. Along with the bearish harmai pattern, Elliott wave X has seem to run its course and a 1.38% Fibonacci ratio pointing to a 1.30 target seems a plausible turning point. Uncertainty may imbue for a few more days as the MACD reaches greater overbought values, before a reversal, wave Y, would finally set in.
It would be better to look for opportunities for going long the CAD, but FED impending decision of interest rate hike would remain very important. Although the decision is imminent, but more macroeconomic variables other than employment may necessitate improvement, before the FED can think of giving a final verdict as to the timing of interest rate hike decision. Till then may the force be with loonie!!!

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